Whether or not U.S. telecom Verizon Communications Inc. comes to Canada, consumers are already seeing some benefits from the threat of increased competition.
Since news broke that Verizon is considering expansion to this country, Canada’s largest carriers have rolled out new plans to attract business, family, and high-volume data usage customers.
U.S. carriers have been shifting focus from selling individual phone packages to multiple lines and shared-data usage plans. The Big Three of Telus Corp, Rogers Communications Inc. and BCE Inc. are following suit, with enhanced packages being offered at prices largely on par with the Big Four in the U.S. and similar data-sharing options across multiple phone lines.
“Where you’re adding phone users and you’re adding data, that’s the sweet spot of the U.S. carriers,” said Amit Kaminer, a research analyst with the SeaBoard Group covering the telecommunications sector. “The wireless incumbents changing their plans and introducing more shared plans, that’s reaction to Verizon coming to Canada.”
Canada’s big three wireless companies are competitive with U.S. rivals on pricing, The Globe found in an informal survey of the cheapest plans including at least 1 gigabyte of data. Verizon appears to be the priciest of all the major U.S. carriers and Canadian major carriers.
Plans with 1 GB are the most common, according to Rogers. Telus says most customers are in the 500 MB to 1 GB range. T-Mobile customers using the latest 4G smartphones typically consume an average of 2GB of data per month.
The threat of a foreign telecom operating in Canada poses a potential shift in competition similar to the entrance of several smaller carriers to the market in the past five years, including Wind Mobile, Mobilicity and Public Mobile, which forced the incumbents to react by adding a slate of cheaper plans. Canadian mobile wireless prices have seen a downward trend over the last five years, according to data collected for the CRTC, and declined by 11 per cent, 13 per cent and 5 per cent this year relative to 2012, for low volume, average use, and high volume use, respectively.
In the high volume use basket (which includes at least 1GB of data usage per month), the CRTC data, which includes the new wireless entrants as well as the incumbents, shows average monthly Canadian prices are lower than U.S. prices, but higher than prices found in the U.K., Australia and France.
“Neither U.S. nor Canada are models to be emulated – prices in some European countries for LTE-based data packages are significantly lower than in either of these North American countries.” said Martyn Roetter, an independent telecom analyst.
Ottawa has defended its moves to bring more competition into the Canadian wireless market against intense lobbying efforts by Canada’s largest wireless companies.Report Typo/Error