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How Canada’s Internet, wireless rates compare with international prices

Canadians continue to pay among the highest telecom prices in many cases, reveals an annual report comparing the prices of Internet, wireless and home phone services across several major developed countries.

Canada ranks within the top three countries when it comes to wireless prices across all six service-plan categories tracked in the study, although cellular plans are cheaper in Canada than in the United States and Japan in several instances.

Canadian prices also place near the top for most home Internet packages but again are cheaper than in the United States.

Related: The battle for spectrum: Canada's coming wireless wave

Published on Thursday, the lengthy report – which was commissioned by the Canadian Radio-television and Telecommunications Commission and prepared by consultancy Nordicity Group Ltd. – also looks at how home telephone and wireless Internet prices stack up internationally.

The information in the study is based on a survey conducted in January and February and it also tracks year-over-year changes in pricing.

On top of international comparisons, the report tracks price differences and changes in various Canadian cities and compares the offerings of the incumbent wireless, telephone and cable companies to the prices charged by new-entrant cell carriers and Internet resellers.

The Nordicity study included a look at how Canada's prices for some of the most popular wireless and Internet packages compare with those in the United States, Japan, Australia, Germany, Italy, France and Britain.

Internet: A need for speed?

During a public hearing this spring, the CRTC reviewed what counts as "basic telecom service" in this country. The focus of the hearing was largely on broadband Internet, with many urging the commission to set a formal target of universal access to download speeds no lower than 10 megabits per second (Mbps).

Ninety-six per cent of Canadian households had access to speeds of at least 5 Mbps by the end of 2014, but as streaming video becomes increasingly popular, those speeds are often viewed as insufficient.

Meanwhile, on a quarterly earnings call with analysts in July, Rogers Communications Inc. chief executive officer Guy Laurence said his company is attracting more and more customers willing to pay for much faster speeds. "Nearly 40 per cent of our residential Internet base is now on 100 megabits or higher," he said.

He later added: "The need for speed is there," pointing to households with an average of 11 devices connected to one router. "Why anybody would go with less than 100-meg speed is a puzzle to me."

From the Nordicity study, here is a comparison of Canadian and international prices for home Internet packages with download speeds of three to nine Mbps, 10 to 15 Mbps and higher than 100 Mbps:

Wireless: All about mobile data

You can still use a smartphone to make a phone call, but most revenue growth in the wireless industry comes from the increasing use of mobile data to browse the Internet and Facebook, stream videos and upload photos.

During the second quarter of the year, Canada's three national wireless carriers, Rogers, Telus Corp. and BCE Inc., added a total of almost 200,000 new contract wireless customers. The companies are all working to sign up subscribers to more lucrative smartphone plans that include larger monthly buckets of data.

BCE chief financial officer Glen LeBlanc explained on an earnings call earlier this month that wireless service revenue in the period "increased 4.6 per cent, driven by higher LTE [4G] data usage," a trend noted by all of the carriers.

The companies don't disclose exact figures, but their customer bases are shifting away from prepaid plans – which tend to be more basic, talk-and-text offerings – to more lucrative contracts, which are usually required to receive subsidies on the most popular smartphones.

Average revenue per user (ARPU) is not an exact proxy for price, but it relates to the prices customers pay. All three carriers reported an increase in wireless ARPU in the second quarter, with Rogers at $60.18, BCE at $64.32 and Telus at $64.38 a month.

Here's how the Nordicity study ranked Canadian and international prices for a basic wireless plan as well as two higher-end packages:

Note: All figures in purchasing power parity-adjusted Canadian dollars. Price data was collected in January and February of this year.

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