Ottawa says Canada’s Big Three wireless carriers have met price-cut targets

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Canada’s three largest wireless carriers have cut the cost of their mid-tier plans by a quarter, meeting the target set by the federal government less than two years ago, according to a new report from Ottawa.

The report, which covers the period from October to December, 2021, and is set to be published Friday, shows that the prices of unlimited talk-and-text plans offering two gigabytes, four gigabytes and six gigabytes of data decreased by exactly 25 per cent from benchmark prices set by the government in early 2020. The plans are offered through the national carriers’ three mid-tier brands, Fido (Rogers), Koodo (Telus) and Virgin (Bell).

Consumers have long complained about wireless prices in Canada, and during the 2019 election campaign the Liberals vowed to tackle the issue if re-elected.

In March, 2020, the Liberal government demanded that BCE Inc. BCE-T, Rogers Communications Inc. RCI-B-T and Telus Corp. T-T slash the prices of their mid-tier plans by 25 per cent within two years or face further regulatory action.

Some consumer advocates, including John Lawford, executive director of the Public Interest Advocacy Centre (PIAC), have argued that the government did not take into account Canadians’ growing appetite for data when it set the price targets. As consumers increase their data usage, they are likely to move to pricier plans and end up paying more for wireless services, Mr. Lawford has said.

The telecoms have also noted that customers are increasingly moving to unlimited plans, which eliminate overage fees and instead reduce customers’ speeds when they hit a data threshold.

The government noted that recent data from Statistics Canada indicates that prices have declined not just for mid-tier plans but also more broadly, decreasing by 26.9 per cent between February, 2020, and December, 2021.

The new data from the Ministry of Innovation, Science and Economic Development (ISED) indicates that two-gigabyte plans were available in December from Fido, Koodo and Virgin for $37.50, while four-gigabyte plans cost $41.25 and six-gigabyte plans cost $45.

The report notes that in Quebec, where wireless prices are typically lower, two- and four-gigabyte plans were already below the benchmark prices set in 2020. Both Fido and Virgin were offering Quebeckers four-gigabyte plans for $40 last December, slightly below the price available in other provinces.

The report comes as Ottawa faces a critical decision on whether to approve Rogers Communications Inc.’s $26-billion takeover of Shaw Communications Inc. SJR-A-X The deal could see the number of wireless competitors reduced from four to three in Ontario, Alberta and British Columbia, unless regulators force Rogers to sell off Shaw’s Freedom Mobile unit.

Three federal agencies are reviewing the merger: the Competition Bureau, ISED and the Canadian Radio-television and Telecommunications Commission.

Freedom has been credited with driving price competition and a number of consumer advocates and academics have argued that allowing Rogers to acquire it would result in higher cellphone bills.

The federal government said it will continue to pursue policies aimed at reducing wireless prices, including around how it awards valuable licences for spectrum, the airwaves used to transmit wireless signals.

“Canadians still pay too much for their internet and cellphones. We’ll continue to push aggressively to generate innovation, improve coverage, and reduce the costs of telecommunications services using every tool we have,” François-Philippe Champagne, Minister of Innovation, Science and Industry, said in a statement.

Last year’s auction for highly prized 5G airwaves netted a record-breaking $8.9-billion in proceeds for Ottawa and saw a number of regional carriers, including Quebecor Inc.’s Videotron Ltd., significantly increase their spectrum holdings. According to an analysis by the Competition Bureau, wireless prices are lower in markets where regional competitors have captured at least 5.5 per cent of the market.

However, executives at Telus and BCE’s Bell Canada have argued that Ottawa’s practice of setting aside wireless airwaves for smaller carriers has inflated their costs and will result in higher consumer prices.

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