Review of Mobile Wireless Services

Comments of the Competition Bureau on Telecom Notice of Consultation CRTC 2019-57

May 15, 2019

On this page:

  1. Introduction
  2. Executive summary
  3. The state of competition in the Canadian wireless industry
  4. Considerations in designing a regulatory framework for wireless services in Canada
  5. Conclusion
  6. Appendices

I. Introduction

  1. Pursuant to section 125 of the Competition Act, the Commissioner of Competition (Commissioner) wishes to intervene in this proceeding, and is pleased to submit these comments of the Competition Bureau (Bureau) in response to Telecom Notice of Consultation CRTC 2019-57 (Notice of Consultation), published by the Canadian Radio-television and Telecommunications Commission (CRTC) on 28 February 2019.Footnote 1
  2. This submission was prepared pursuant to the Bureau's role as an advocate for the benefits of competition. In this role, the Bureau advocates that regulators and policy makers regulate only where necessary and that they rely on market forces as much as possible to achieve the benefits of competition. Where market forces are insufficient to achieve certain policy objectives, the Bureau provides advice to regulators on how to implement policies that achieve their objectives in a minimally intrusive way.
  3. In addition to this advocacy role, the Bureau, as an independent law enforcement agency, ensures that Canadian consumers and businesses prosper in a competitive and innovative marketplace by administering and enforcing the Competition Act and related statutes throughout the Canadian economy.

II. Executive summary

  1. The Bureau applauds the CRTC for initiating a proceeding aimed at increasing Canada's economic efficiency and helping Canadians by substantially improving the affordability of wireless services.
  2. In this first intervention, the Bureau draws on public data to present high-level findings on the state of competition in Canada's wireless services markets (section III) and then offers some considerations for designing a regulatory framework (section IV).
  3. The Bureau's most recent review of Canada's wireless services markets found that regional price differences are substantial and attributable to differences in competition.  Specifically, the Bureau's nine-month review of BCE Inc.'s (Bell) 2017 acquisition of Manitoba Telecom Services (MTS), found that higher prices exist where there is no strong regional competitor, and were likely a result of softened competition among the three national wireless carriers.  Further, factors such as network quality and population density did not explain the price differences.
  4. This submission reviews more recent public data that demonstrates the persistence and magnitude of those price differences, and a continued lack of alternate factor that explains the pattern.  In short, wireless plans continue to be priced substantially higher in other provinces than in Quebec, Manitoba and Saskatchewan.Footnote 2  Given that the patterns identified in the Bureau's review of Bell/MTS continue to persist, it is likely that these higher prices continue to reflect a lack of vigorous competition among the three national wireless carriers.
  5. However, public information on past and current outcomes may not be representative of likely future outcomes in Canada. It is possible that facilities-based entrants, such as Freedom Mobile (Freedom), could soon develop into entities that disrupt the wireless status quo in other areas of Canada, to the benefit of Canadians.
  6. Whether facilities-based competitors can overcome the substantial barriers to entry that exist in Canadian wireless services markets is an important question in this proceeding where the CRTC is considering regulation in the form of mandated Mobile Virtual Network Operator (MVNO) access.
  7. A cost-benefit analysis of mandated MVNO access and any feasible alternative options is needed so that the CRTC can determine the best course of action.Footnote 3 This cost-benefit analysis should be contextualized with an understanding of current market realities. Mandated MVNO access may be a necessary next step to increase the affordability of wireless services for consumers but as with all regulated solutions, it is not without risk. Chief among these risks is disrupting current network expansions by existing regional carriers and entrants, compromising investments in 5G technologies, and potentially undermining the current and future success of existing regional carriers and entrants like Videotron and Sasktel.
  8. As such, in section IV of this submission the Bureau will offer considerations for the CRTC to examine in deciding upon, and designing, a regulatory framework. This includes the benefits and challenges associated with a regulated solution like mandated MVNO access. The Bureau will also raise alternatives that could be considered should the CRTC decide to prioritize facilities-based competition.

III. The state of competition in the Canadian wireless industry

a. The majority of Canadians have been denied the benefits of competition among wireless service providers

  1. In 2016 and 2017, the Bureau conducted an in depth review of the acquisition by Bell of MTS. As part of its investigation, the Bureau conducted a thorough pricing analysis using confidential internal company data. Specifically, that analysis showed that mobile wireless pricing in Saskatchewan, Thunder Bay, Quebec and Manitoba—all areas that had a strong regional competitor—was substantially lower than in the rest of Canada, where coordinated behaviour softened competition among Bell, Rogers and Telus.Footnote 4
  2. In assessing coordinated behaviour, the Bureau considered the degree of multi-market exposure among the national carriers. Firms have multi-market exposure when they compete across several geographies or product lines. Multi‑market exposure can lead to a reduction in competition when a firm chooses not to compete aggressively in one market, for fear of their competitor's retaliation in other markets. If, however, firms with multi‑market exposure encounter a firm that does not possess these same incentives in a particular market, coordination can break down in that space. Multi-market exposure among the national carriers is significant, and encompasses a number of geographies and business lines at retail.
  3. In addition to multi-market exposure, the Bureau found that Canadian wireless markets exhibit a number of characteristics that make them susceptible to coordination. Specifically, the Bureau's investigation revealed that pricing is transparent for wireless carriers who closely monitor one another's pricing through a variety of methods, and that the threat of retaliation from competitors is a significant factor in pricing decisions. Notably, Bell, Rogers and Telus can signal their future pricing intentions by using promotional pricing with pre-specified end dates, as well as by publicly announcing their future pricing strategies in investor calls or other public fora.
  4. The Bureau examined alternative explanations for regional price differences. However, it did not find a relationship between any measure of quality, coverage, demographics or geographic characteristics that could explain the differences in price. The Bureau, thus, concluded that substantial differences were based on the presence or absence of a strong regional competitor, which disrupted coordination among the national wireless carriers.
  5. Due, again, to the presence or absence of a strong regional competitor, the Bureau's investigation also found that data usage was substantially greater in the areas where prices were lower. This means that the exercise of market power in wireless markets is accompanied by a supply restriction, which reduces output in the Canadian economy. In other words, when faced with high prices, consumers in turn, lower the amount they consume.
  6. Consequently, the Bureau concluded that Canadians were paying prices that were above competitive levels in regions of Canada that lacked a strong regional competitor.

b. Public data show that many Canadians continue to pay substantially higher prices in certain regions in Canada

  1. While the Bureau does not have access to current non-public data on wireless prices, public data demonstrates the persistence and magnitude of price differences across provinces in Canada.
  2. Figure 1 and Figure 2 provide a simple illustration of prices advertised on Bell's website as of April 15, 2019. On that date, Bell's website offered the same 10GB plan in Saskatchewan and Ontario. While the Saskatchewan price was $60, the Ontario price was $110 – over 80% more expensive. Similar comparisons can be made using the pricing posted on the Rogers and Telus' websites (See for example, Figure 5 and Figure 6).

    Figure 1: Bell pricing of a 10GB plan in Ontario<

    • Figure1: Bell pricing of a 10GB plan in Ontario

      A screenshot from Bell’s website of a Bell mobile plan for customers in Ontario. Customers must bring their own phone or buy one at full price. The plan includes unlimited nationwide calling and 10GB (6GB of shareable data plus 4GB of bonus data) for a total price of $110 per month.

    Figure 2: Bell pricing of a 10GB plan in Saskatchewan

    • Figure 2: Bell pricing of a 10GB plan in Saskatchewan

      A screenshot from Bell’s website of a Bell mobile plan for customers in Saskatchewan. Customers must bring their own phone or buy one at full price. The plan includes unlimited nationwide calling and 10GB (5GB of shareable data plus 5GB of bonus data) for a total price of $60 per month.

  3. Figure 3 and Figure 4 show that "flanker" brands also have a similar price difference between provinces. As of April 15, 2019, Bell's flanker brand, Virgin, offered on its website an 8GB plan in Ontario for $75 and offered that same plan in Saskatchewan for $45 – a difference of over 60%.

    Figure 3: Virgin pricing of an 8GB plan in Ontario

    • Figure 3: Virgin pricing of an 8GB plan in Ontario

      A screenshot from Virgin’s website of a Virgin mobile plan for customers in Ontario. Customers must bring their own phone or buy one at full price. The plan includes unlimited nationwide calling and 8GB (5GB plus 3GB of bonus data) for a total price of $75 per month.

    Figure 4: Virgin pricing of an 8GB plan in Saskatchewan

    • Figure 4: Virgin pricing of an 8GB plan in Saskatchewan

      A screenshot from Virgin’s website of a Virgin mobile plan for customers in Saskatchewan. Customers must bring their own phone or buy one at full price. The plan includes unlimited nationwide calling and 8GB of data for a total price of $45 per month.

  4. Public information indicates that wireless plans in Quebec, Manitoba and Saskatchewan are consistently lower than in the rest of Canada. Figure 5 and Figure 6 illustrate this pattern by reporting pricing across provinces for the national carriers' main brands as well as their main flanker brands respectively. These charts not only underscore the substantial price differences across provinces, but also show the similarity in the pricing of the national carriers within provinces.

    Figure 5: Bell, Rogers and Telus pricing for 10GB* plans by province

    • Figure 5: Bell, Rogers and Telus pricing for 10GB* plans by provinceFootnote 5
      Bell, Rogers and Telus pricing for 10GB* plans by province
      * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
      Province Bell Rogers Telus
      Yukon $110 $110 $110
      Northwest Territories $110 $110 $110
      Nunavut $110 $110 $110
      Nova Scotia $110 $105 $110
      Prince Edward Island $110 $105 $110
      Newfoundland and Labrador $110 $105 $110
      New Brunswick $110 $105 $110
      Ontario $110 $110 $110
      Alberta $110 $110 $110
      British Columbia $110 $110 $110
      Quebec $75 $75 $75
      Saskatchewan $60 $65 $75
      Manitoba $65 $65 $75

    Figure 6: Virgin, Fido and Koodo pricing for 6GB* plans by province

    • Figure 6: Virgin, Fido and Koodo pricing for 6GB* plans by provinceFootnote 6
      Virgin, Fido and Koodo pricing for 6GB* plans by province
      * 6GB plans or higher were not available in some provinces and therefore not included. Plan offered by Virgin in Saskatchewan includes 8GB and the plans offered by Fido in Saskatchewan and Manitoba include 10GB.
      Province Virgin Mobile Fido Koodo
      Yukon $65 $- $65
      Northwest Territories $65 $-   $65
      Nunavut $65 $-   $65
      Nova Scotia $65 $65 $65
      Prince Edward Island $65 $65 $65
      Newfoundland and Labrador $65 $65 $65
      New Brunswick $65 $65 $65
      Ontario $65 $65 $65
      Alberta $65 $65 $65
      British Columbia $65 $65 $65
      Quebec $49 $49 $49
      Saskatchewan $45 $58 $-
      Manitoba $- $58 $-
  5. The Bureau's review of Bell's acquisition of MTS showed a similar pattern. Based on confidential data that covered the period between 2014 and 2016, the Bureau found that mobile wireless pricing in Saskatchewan, Thunder Bay, Quebec and Manitoba was substantially lower than in the rest of Canada.
  6. MTS president Kelvin Shepherd, in the context of Telecom Notice of Consultation CRTC 2014-76, expressed a similar view:
    "Our respective territories are the most competitive wireless markets in the country. Consumers in our regions, regardless of carrier, can find packages at prices 30-40 percent lower than elsewhere in the country, saving consumers $350 to $400 per year."Footnote 7
  7. As part of his testimony, Mr. Shepherd presented a visual depiction of price differences across regions in Canada that shows the same pattern apparent in Figure 5 and Figure 6 (Appendix A).
  8. Additionally, the Bureau has collected publicly available pricing data over the last 20 months. Those data also show the same pattern (Appendix B). For instance, as of April 10, 2018, the cost of a Rogers 8GB plan in Alberta, where no strong regional carrier was present, was $120. The cost of a Rogers 10GB plan in Saskatchewan, where a strong regional competitor was present, was $65–a difference of approximately 85%. These price differences existed at the time of the Bell/MTS review and have persisted over the subsequent period during which the Bureau has been collecting pricing data.
  9. On the basis of publicly available information, wireless prices in Manitoba do not appear to have increased subsequent to the acquisition of MTS by Bell. Following the March 2017 closing of that acquisition, Bell publicly committed to not raising wireless prices in Manitoba for one year.Footnote 8 Additionally, to remedy the Bureau's concerns with the merger, Bell agreed to divest a significant number of MTS post-paid subscribers and approximately one-third of MTS dealer locations to Telus as well as to divest assets and provide transitional services to Xplornet, including the divestiture of 40MHz of spectrum, 6 retailer stores and 24,700 subscribers.Footnote 9
  10. Factors such as quality, coverage, demographics or geographic characteristics do not explain the provincial price differences.  This was confirmed both during the Bureau's review of Bell's acquisition of MTS, as well as using publicly available data.
  11. To illustrate, as of April 15, 2019, the average cost of a 10GB plan sold by the national wireless carrier's main brands in Saskatchewan was $66.67, while the average cost in New Brunswick was $108.33. However, according to 2018 network quality data collected by PCMag, network quality in Saskatchewan is better than network quality in New Brunswick.Footnote 10 Figure 7 considers pricing and measures of network quality across all provinces and shows a general lack of relationship between pricing and network quality.

    Figure 7: Average plan cost of a Bell, Rogers and Telus 10 GB* plan vs. average network quality by province

    • Figure 7: Average plan cost of a Bell, Rogers and Telus 10 GB* plan vs. average network quality by provinceFootnote 11
      Average plan cost of a Bell, Rogers and Telus 10 GB* plan vs. average network quality by province
      * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
      Province Average network quality
      (PC Mag Score)
      Average plan cost
      Newfoundland and Labrador 90.33 $108.33
      Prince Edward Island 88.00 $108.33
      Nova Scotia 89.33 $108.33
      New Brunswick 85.00 $108.33
      Quebec 94.67 $75.00
      Ontario 94.67 $110.00
      Manitoba 89.33 $68.33
      Saskatchewan 91.00 $66.67
      Alberta 94.67 $110.00
      British Columbia 94.33 $110.00
  12. The lack of relationship between pricing and network quality is also true at the carrier-level. See Appendix C.
  13. Other factors, such as population density, income and demographic characteristics, also do not explain differences in price across provinces.Footnote 12 For instance, despite a significantly higher population density, an average 10GB plan in Prince Edward Island costs over 40% more than in Quebec. Figure 8 illustrates this lack of relationship more generally by considering pricing and population density across all provinces.Footnote 13 Appendix D contains further detail on other demographic characteristics.

    Figure 8: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. population density by province

    • Figure 8: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. population density by provinceFootnote 14
      Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. population density by province
      * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
      Province Population Density ppl/km^2
      (Total Province)
      Average plan cost
      Newfoundland and Labrador 1.4 $108.33
      Prince Edward Island 25.1 $108.33
      Nova Scotia 17.4 $108.33
      New Brunswick 10.5 $108.33
      Quebec 6 $75.00
      Ontario 14.8 $110.00
      Manitoba 2.3 $68.33
      Saskatchewan 1.9 $66.67
      Alberta 6.4 $110.00
      British Columbia 5 $110.00
      Yukon 0.1 $110.00
      Northwest Territories 3.9 $110.00

Challenges with using public data for comparisons of wireless pricing across different regions in Canada

  1. No publicly available data speaks to usage differences across provinces or regions which, as explained below, is an important figure to consider. Average Revenue Per User (ARPU) is available provincially but is not a reliable measure of provincial price differences in Canada since it lacks this information.
  2. To calculate average revenue per user one simply divides revenue by the number of subscribers. Provincial ARPU data show, for example, that 2017 ARPU in Saskatchewan was $68.47, which is approximately the same as in Ontario at $68.25.Footnote 15 While such numbers do reflect consumers' spending on wireless services, those numbers do not provide a valid basis for a comparison of prices because consumers in different provinces purchase and use different amounts of data. 
  3. For instance, as a simplified illustrative example, suppose that underlying the ARPU figures above, one finds that consumers in Ontario purchase an average of 1GB per month and that consumers in Saskatchewan purchase an average of 5GB per month. While the ARPU figures above suggest pricing in Ontario and Saskatchewan are comparable, an understanding of usage in these provinces would reveal that in Ontario customers pay $68.57 per GB of data, whereas customers in Saskatchewan pay $13.70 per GB of data.
  4. While that is a simplified example, the Bureau's past analysis of confidential data in its review of Bell/MTS found that significant differences in usage do exist- and in particular, that usage is higher in provinces where pricing is lower. As such, ARPU is not an accurate measure of provincial price differences and will not be discussed further in this submission.
  5. Public pricing data also has limitations. First, it is only available at the provincial level, and so cannot show more local differences in pricing. For example, pricing in Toronto likely continues to differ substantially from that in Thunder Bay. Similarly, the national wireless carriers could be responding to Freedom's presence in certain areas by offering promotions that are not widely advertised. These differences cannot be captured using public pricing data.
  6. Second, public data is not available to calculate an appropriately weighted average regional price, which is important for assessing overall price levels within a province or region. In particular, public data lacks information on what plans Canadians in various regions actually buy so an overall price level cannot be calculated. Ideally, such data would permit a statement along the lines of "Prices in regions without a strong regional competitor are x% greater than they are in regions with a strong regional competitor." As will be described in the next section, such a statement could provide useful guidance for a regulatory intervention.Footnote 16
  7. Nonetheless, the Bureau has previously conducted an analysis of differences across regions in Canada using confidential company information that included information on what Canadians in various regions actually buy.  As a result, while not conclusive on its own, the analysis of public pricing data described above is consistent with, and supplemental to, the Bureau's previous analysis. Additionally, the analysis of public data provides useful insights regarding whether those substantial differences across regions have persisted since the Bureau's review of Bell/MTS in 2017.

c. International comparisons generally suggest that Canadian prices for wireless plans are high relative to other countries

  1. International comparisons generally suggest that Canadian prices for wireless plans are high relative to other countries. There are a number of studies conducted regularly that compare wireless plan prices across countries. Generally, these studies find that Canadian prices for wireless plans are substantially higher than those in other countries. While making such international comparisons can be challenging, certain inferences can be made from recent studies, as outlined below.

Challenges to cross-country comparisons of wireless pricing

  1. It is widely recognized that comparing wireless prices across countries can be difficult.Footnote 17 Difficulties arise for two main reasons.
    1. The first reason concerns the whether or not theseprice differences actually exist. Most notably, wireless plans frequently differ across countries in terms of voice, text, or data allowances. These differences can make it difficult to determine whether prices in one country are, in fact, higher or lower than in another country. Studies address this challenge by either trying to combine plans into "baskets" that contain plans that are broadly comparable (e.g., a "high use" basket) or by using econometric methods to infer a price per some well-defined unit (e.g., price per GB).
    2. The second reason concerns the interpretation of price differences. Put simply, price differences may exist independent of differences in competition. For example, differences in costs or characteristics of networks may drive differences in prices. Studies address this challenge through the use of econometric techniques that control for observable factors (e.g., network quality). This process attempts to remove such effects so that any remaining difference in prices is only due to differences in competition.
  2. These challenges are addressed to varying extents and with a diversity of techniques and data in cross-country comparisons of wireless pricing. That diversity is useful to keep in mind when assessing these studies. Specifically, the confidence attached to a conclusion generally increases when different studies using different methodologies and data come to that same conclusion. In this case, different studies using different methodologies and data generally find that Canadian prices for wireless plans are substantially higher than those charged in other countries.

Summary of international price comparisons

OECD study
  1. The Organization for Economic Cooperation and Development (OECD) regularly measures wireless pricing across countries.Footnote 18 The OECD approach considers pricing across 35 countries in three baskets of use: a "low user" basket (including 100 calls and 500MB data per month), a "medium user" basket (including 300 calls and 1GB data per month), and a "high user" basket (including 900 calls and 2GB data per month). The most recent results are from May 2017.
  2. In 2017, Canada ranked among the most expensive countries: it was the third most expensive country for the high and medium user categories and the fourth most expensive country for the low user category.Footnote 19 The difference between prices in Canada and prices in other countries is substantial. For example, in the high user basket, the price in Canada was 85% higher than the (simple) average of all 35 countries in that basket ($58.31USD versus $31.46USD).
  3. In interpreting these differences, it is notable that the OECD used prices of flanker brands, which are usually priced lower, as representative of Canadian prices.Footnote 20
  4. The OECD analysis is easy to understand as it relies on no sophisticated econometric analysis. For example, the "high user" basket considered a Fido bring-your-own-phone plan with unlimited talk and text and 3GB of data, which was priced at $58.31USD. A more generous plan offering 15GB of data in France had a price of $16.58USD.
ISED/Wall study
  1. ISED has commissioned a series of studies most recently conducted by Wall Communications, Inc. (Wall) whose purpose is "to provide a detailed comparative price analysis of telecommunications services in Canada relative to the United States and six other countries."Footnote 21 These studies have consistently found wireless prices in Canada to be high relative to the other countries studied. These studies use a similar methodology to that used in the OECD study described above.
  2. The Wall study has received significant attention in Canada. Along with that attention has come criticism of its methodologies.Footnote 22 Similar to the OECD's methodology, the Wall methodology groups plans from different countries into various baskets. Thus, one challenge concerns whether this methodology groups plans that are sufficiently similar so that the comparisons are meaningful. One line of criticism is that the Wall comparisons do not group like with like so "[t]here is no reason to believe that this repeated apples-to-oranges comparison produces meaningful results."Footnote 23
FCC study
  1. Recently, the United States Federal Communications Commission (FCC) conducted an international comparison of wireless prices.Footnote 24 It is more complex than the OECD or Wall studies in that, instead of simply reporting the prices of representative plans within a given basket, the FCC study reports the results of two separate analyses: a price index comparison and a hedonic price index comparison. The former calculates a (weighted) average price for a fixed collection of plans. The latter aims for a more "apples-to-apples" comparison through the use of econometric methods to remove the potential effects of country-level differences in cost, demographics and quality measures (e.g., download speeds).
  2. Out of the 29 countries studied, Canada generally ranked among the most expensive. For example, in the price index comparison, Canada ranked next-to-last (28th out of 29) for non-shared plans and 23rd out of 29 for shared plans. Overall, it ranked 25th out of 29. In the hedonic price index comparison, Canada again fairs poorly in three of four models estimated.
Other studies
  1. Two other studies use alternate methodologies and different data to arrive at similar conclusions:
    • Rewheel conducted a study in April 2018 that documented how many GB of 4G data €30 would buy.Footnote 25 In half of all 28 EU countries, €30 bought 100 or unlimited GB. In Canada, that same amount of money bought 2GB, which exceeded only Greece, Malta, Korea and Hungary.
    • tefficient collected data on wireless monthly revenue per GB used. It also collected data on monthly GB used per SIM card.Footnote 26 Canada was found to have the highest revenue per GB used at over €30 per GB used. Canada also ranked among the lowest in terms of GB used per SIM card at under 2GB per month. That study concluded "that the key explanation to high mobile data usage is low effective revenue per gigabyte."Footnote 27 This relationship is the same as the Bureau found in its review of Bell's acquisition of MTS—where wireless prices are lower, data usage is higher. See section III.a.
  2. Dr. Christian Dippon conducted a study, commissioned by Telus, that comes to very different conclusions.Footnote 28 The study criticizes the methodology of the Wall analysis and adopts an approach that is somewhat similar to that used by the FCCFootnote 29 Contrary to the other studies described above, the Dippon study finds that wireless prices in Canada are actually lower than those in other countries.
  3. It is the Bureau's view that Dippon's results are driven by the data used in the study, which contain errors and, generally, are not representative of plans actually used by Canadians. For example, the study uses an advertised price for a Bell 3GB plan in Ontario of $55 in March 2018. The Bureau has collected publicly available information on wireless prices in Canada for the past 20 months. On the basis of these data, the Bureau believes that this substantially understates the actual prices, which are typically between $85 and $90. See Figure 21 and Figure 22 in Appendix F.
  4. Additionally, roughly one-fifth of the data in Dr. Dippon's study include plans from very small operators such as 7-Eleven, Primus and Petro-Canada notwithstanding the fact that the top three carriers accounted for nearly all the mobile subscriber share of all provinces except for Saskatchewan and Quebec in 2017.Footnote 30 Moreover, exactly half of Canadian plans in the data are pre-paid plans despite the fact that CRTC data show that only 12% of Canadian subscribers use a prepaid plan.Footnote 31 In light of these and other factors, along with the results from the other studies, the Bureau believes that the CRTC should place little weight on the results of Dr. Dippon's study.

d. International comparisons suggest that Canadian wireless carriers earn EBITDA profits that are high relative to other countries

  1. Earnings before interest, taxes, depreciation, and amortization (EBITDA) is a widely reported measure of accounting profits which can be an indicator of market power.Footnote 32 Recent data from Merrill Lynch show that Canadian carriers have high EBITDA relative to other countries.Footnote 33 Specifically, these data show that Canadian wireless carriers rank highest in terms of EBITDA of all countries studied. Canadian carriers earn an average 58% in EBITDA service margin, 28 percentage points higher than the UK and Denmark, which earn the lowest EBITDA. These data are reported in Figure 9.

    Figure 9: Wireless carrier EBITDA by country

    • Figure 9: Wireless carrier EBITDA by countryFootnote 34
      Wireless carrier EBITDA by country
      Country EBITDA Margin
      Canada 58%
      Hong Kong 53%
      Austria 51%
      Sweden 50%
      Italy 50%
      Switzerland 48%
      Norway 48%
      Australia 47%
      Finland 47%
      France 47%
      Netherlands 47%
      Portugal 44%
      US 42%
      Singapore 42%
      Germany 42%
      Belgium 38%
      New Zealand 37%
      Spain 34%
      UK 30%
      Denmark 30%
  2. An accounting measure of profitability, such as EBITDA, may not reflect economic profits and, hence, market power. Nevertheless, these figures are consistent with the financial health of Canada's wireless service providers. Such publicly available data should be considered when assessing concerns that regulatory intervention or more competition would adversely impact the market value of the communications sector in Canada and increase the cost of capital to that sector.Footnote 35

e. Summary

  1. Based on the Bureau's previous analysis of Bell/MTS and the analysis above it is likely that a large number of Canadians do not benefit from vigorous competition among wireless service carriers. As described, the principal evidence that supports that conclusion is the existence of substantial price differences across regions in Canada, which demonstrate the extent to which prices are increased when the national wireless carriers can effectively coordinate their pricing decisions. However, price is unlikely to be the only outcome that is affected by the vigour of competition. It is highly likely that Canadians also curtail their data consumption substantially when faced with higher prices.Footnote 36
  2. Further, the international comparison studies reviewed above reflect an important pattern: despite the limitations of these types of comparisons, different approaches that use different data and different methodologies show that prices in Canada are generally substantially higher than those in other countries.
  3. The conclusion that wireless competition in Canada lacks vigour is based on non-public information about past outcomes and public information about current outcomes. As such, that conclusion requires an important caveat: public information on current outcomes may not be sufficient to develop accurate predictions of likely future outcomes in Canada. This caveat is necessary due to the recent entry and expansion of facilities-based competitors, Freedom and Eastlink and will be discussed further in the proceeding section.

IV. Considerations in designing a regulatory framework for wireless services in Canada

a. The benefits and challenges of regulated solutions 

  1. In a perfectly competitive market, social welfare is maximized, and outcomes are efficient. However, in some situations, referred to as "market failures" the conditions required to achieve the efficient outcome are not present. An exercise of market power is an example of a possible market failure. Market failures can be an important reason why the government may need to intervene through regulation.Footnote 37
  2. However, regulatory intervention can also come at a cost. For example, regulations may also reduce innovation by not providing market-based incentives to encourage technological advances. Thus, market-oriented approaches or performance-based standards are alternatives that have the potential to achieve the same goals in perhaps a more desirable manner.Footnote 38
  3. As a result of this trade off, a "best practice" for regulators in deciding whether to pursue regulatory intervention is to assess both regulatory and non-regulatory options to maximize net benefits to society as a whole. A regulator considers whether the recommended option maximizes the net benefits to Canadians, and businesses over time when compared to another other type of regulatory or non regulatory action.Footnote 39
  4. In accordance with this approach, to date, the CRTC has consistently chosen policies aimed a promoting facilities-based competition, based on a view that "facilities-based competition is the best means of ensuring that Canadians receive high-quality, affordable mobile wireless services provided over leading-edge wireless networks."Footnote 40 The CRTC's view has been that this market-based policy aimed at facilitating entry by new wireless carriers could simulate competition and thereby reduce wireless rates paid by Canadians.Footnote 41
  5. However, as described in this proceeding's Notice of Consultation the CRTC's preliminary view is to shift to a regulated solution and mandate that national wireless carriers provide MVNO access as an outcome of the proceeding. This change in perspective is being considered due to concerns of market failure that existing policies have not been able to sufficiently remedy. Specifically, that the market may not be meeting the needs of Canadians,Footnote 42 and concerns that a sustainable retail MVNO market has failed to develop of its own accord.Footnote 43
  6. The key difference between an approach that stimulates facilities-based competition and one that mandates MVNO access is that the former is a solution that relies on the competitive process whereas the latter is a regulated solution.  The international experience in wireless markets has been that the competitive process generally achieves favourable outcomes. This finding is reflected in work by the OECD (a Mobile Network Operator (MNO) is a facilities-based carrier):
    "…in countries where there are a larger number of MNOs, there is a higher likelihood of more competitive and innovative services being introduced and maintained."Footnote 44
  7. Mandated MVNO access on the other hand differs from policies aimed at promoting facilities-based competition. The former imposes some form of regulation that necessarily leads to MVNO access; the latter seeks to remove barriers to entry and expansion in order to promote entry by new competitors based on market forces.
  8. Whether mandated MVNO access is the best way to foster competition in Canada's retail wireless market is not clear at this stage in this proceeding. However, economic literature can provide us with a framework in which to consider this question.
  9. A consensus in the economic literature has formed that "regulation should be adapted to suit specific conditions in each industry."Footnote 45 In other words, choosing the right form of regulation requires an understanding of the likely current and future conditions, and then, assessing the benefits of any specific form of regulation relative to its costs. For example, if one is considering regulation in an industry where the exercise of market power is (or will soon be) unlikely, the benefits of regulation will likely be outweighed by the costs – especially if the regulation itself threatens to limit the development of competition that would otherwise prevent the exercise of market power. Instead, a regulated solution is more likely to improve outcomes if it is imposed in an industry where the exercise of substantial market power is likely in the present and future.
  10. Applying this thinking to the Canada's wireless markets, it certainly may be the case that a regulated solution like mandated MVNO access is a necessary next step to improve outcomes in Canadian wireless markets. If the CRTC's existing policies aimed at promoting facilities-based competition are not showing promise of delivering lower prices for consumers regulation may be an important tool for protecting Canadians by delivering affordable options in wireless markets in Canada.  
  11. However, if it is the case that facilities-based carriers are currently, or are likely to deliver those benefits to Canadians in the near future, the CRTC may also want to consider alternative and/or additional strategies to stimulate competition among facilities-based carriers.  
  12. This is particularly the case since there are two potential risks or "costs" to be considered in weighing the CRTC's options that could result from mandated MVNO access. Namely, mandated MVNO access:
    1. is challenging to implement effectively and could reduce investment incentives; and  
    2. could limit the incentive and ability for existing facilities-based entrants and regional carriers to disrupt the wireless market.

Evidence regarding challenges in rate setting and balancing investment incentives is limited

  1. The CRTC correctly recognizes and is uniquely positioned to understand the challenges of formulating regulation to achieve policy objectives. If one is considering imposing regulation in an industry where extensive investments will be required, the balance between properly structuring rates, terms and conditions can be challenging. At one extreme, if regulation allows firms to set rates, terms and conditions freely, regulation will be ineffectual since there is no change to pre-existing incentives. At the other extreme, however, if regulation is too restrictive, firms may see their incentives to make further investments diminished.Footnote 46 This is a particularly important consideration since wireless carriers are poised to begin introducing 5G wireless technology into their networks and "this technology upgrade will mean that wireless networks will become exponentially faster, more pervasive, and more versatile."Footnote 47
  2. Despite these challenges, regulation like mandated MVNO access, which compels a party to make goods or services available on specific terms is not uncommon. For example, utilities are frequently regulated. The accepted theory holds that regulated firms, because of substantial economies of scale or scope or some other characteristic, would enjoy substantial market power absent regulatory constraints. Regulation's ability to attenuate the exercise of market power constitutes its principal benefit.
  3. However, as described, the cost of regulatory intervention can be substantial and can include a loss of innovation.Footnote 48 In addition to its theoretical underpinnings, the notion that mandating MVNO access can reduce incentives to make further investments has some limited empirical support. Specifically, a published study by Kim, Kim, Gaston, Lestage, Kim, and Flacher examined data from 21 OECD countries from 2000-2008 and found that mandated MVNO access was associated with lower investments by MNOs.Footnote 49
  4. In contrast to the potentially harmful effects of regulation on investment, there is less cause for concern that vigorous competition stemming from facilities-based competition would lead to a reduction in investment, innovation, and quality. For instance, as the OECD has stated, the experience in other countries has been that:
    "…in markets introducing new players or maintaining at least four operators, investments in new network infrastructure increase and are pulled forward by existing operators, to defend against challengers."Footnote 50
  5. In short, evidence on whether and how to properly structured rates, terms, to mitigate the potential negative impacts of a regulated solution like mandated MVNO access on future investments is limited but provides some cause for concern.
  6. One source of information that the CRTC could consider is what rates are currently sustainable in parts of the country with more vigorous competition and high quality networks. Understanding the magnitude of regional price differences will assist the CRTC in determining the appropriate rate. For example, knowing that Sasktel can sustainably charge a certain rate in Saskatchewan could be used as a plausibility check when the CRTC is conducting its analysis of what access rate to charge. Unfortunately, as explained in the Commissioner of Competition's reconsideration request, accurately estimating the magnitude and causes of price differences across provinces will not be possible with public data or the information requested by the CRTC in this proceeding to date.Footnote 51

Mandated MVNO access could limit the incentive and ability for existing facilities-based entrants and regional carriers to disrupt the wireless market

  1. It is possible that even assuming new facilities-based competitors in Canada will overcome those barriers and disrupt status quo wireless competition, a risk remains that mandated MVNO access could limit their incentive and ability to do so.
  2. International experience suggests that facilities-based entrants are typically "challengers" in the sense that they challenge incumbent offerings and pricing.Footnote 52 That insight appears to reflect the Canadian experience where, for example, Freedom typically charges (publicly advertised) prices that are low relative to the brands of the national carriers, including the national carriers' main flanker brands.Footnote 53
  3. International experience shows that MVNOs usually position themselves similarly in that they offer plans with aggressive pricing and generous data allowances.Footnote 54 Thus, in theory, mandating MVNO access could disproportionately take business away from entrant facilities-based operators in Canada, thereby lowering their rates of return on additional investment. MVNO-based competition that disproportionately targets facilities-based entrants may prevent those entrants from developing further to challenge the wireless status quo in Canada.
  4. The considerations that applied when the CRTC considered the impact of broadening the definition of a "home network" on investment in Telecom Notice of Consultation 2017-259 (TNC 2017-259) are analogous to the considerations in this proceeding.Footnote 55 In TNC 2017-259 carriers explained that non-facilities based providers (in this case MVNOs) could undermine the business case for facilities-based entrants and regional players like Freedom, Sasktel and Videotron to effectively compete and invest "at a critical point in their development as sustainable competitors".Footnote 56
  5. If access rates were set too low, it could be difficult for facilities-based entrants and regional carriers to respond to competition from MVNOs. They could not charge more than an MVNO as that would make their offerings unappealing to consumers, and they could not charge equal to or less than MVNOs, but also continue to invest, because they would not have sufficient revenue. Inevitably, non-facilities based service providers would attract some of the wireless carrier's customer base, leaving fewer customers to help recover its network investment. This would reduce the ability and incentive of all facilities-based competitors to roll out next-generation technologies or expand into new areas and potentially bring competitive discipline to those markets. However, conversely, if access rates were set too high, MVNOs would likely be ineffective and not have a competitive impact on the market. 
  6. Ultimately in TNC 2017-259, the CRTC found that "[i]f mandated resale competition were to occur in these areas it would likely splinter the market and reduce the number of customers that the other wireless carriers are relying on to generate revenue.Footnote 57 The CRTC also found that Bell, Rogers and Telus' longer-term plans are unlikely to be affected to any noticeable extent by the introduction of mandated resale competition, rather the risk to investment and expansion is greater for the facilities-based entrants and regional carriers.Footnote 58 For these carriers, this could mean eroding their incentive and ability to disrupt the status quo in the Canadian wireless markets. This could undermine the success of carriers such as Videotron, Sasktel and Tbaytel that currently are delivering benefits to Canadians as a result of more vigorous competition in the markets where they operate.

b. The Bureau cannot at this time opine on whether MVNO access is a warranted regulatory shift

  1. With the risks of mandated MVNO access understood, it is important to note that – on the other hand, it is currently unclear whether facilities-based entrants are likely to develop into entities that disrupt the wireless status quo in Canada.
  2. Knowing whether existing facilities-based competitors are currently disrupting coordination by the national wireless carriers is critically important to the questions the CRTC is considering in this proceeding. Specifically, some form of regulation (e.g., mandated MVNO access) becomes more likely to be effective if facilities-based competitors are unlikely to effectively challenge the positions of the national wireless carriers. In contrast, a policy that relies principally on the competitive process—instead of regulation—would be more likely to be effective if evidence emerges that facilities-based competitors are increasingly disrupting the status quo.
  3. The suggestion that such disruption may occur is not implausible. Freedom recently transitioned to LTE service, which constituted a significant upgrade from its previous 3G network.Footnote 59 Eastlink has developed an award-winning network in Nova Scotia and PEI.Footnote 60 The results of the recent 600MHz auction demonstrate a commitment by the new facilities-based entrants to develop their offerings further.Footnote 61 Most notably, in late 2017, the national wireless carriers engaged in a highly-publicized series of price decreases to respond to Freedom's 10GB for $50 offer.Footnote 62
  4. The growth and expansion of Freedom and Eastlink provide natural experiments to understand whether existing policies aimed at promoting facilities-based competition are showing promise of disrupting the status quo in Canada.  For example, if national carriers were found to be cutting prices in regions where Freedom or Eastlink are active, that finding would support a conclusion that facilities-based competition is in the process of invigorating wireless competition in Canada. This could be a promising sign given they are continually expanding into new areas.
  5. However, as described in the Commissioner's request for reconsideration, without further information, a finding regarding whether Freedom and Eastlink are, in fact, disrupting coordination between the national wireless carriers will be more subjective based on qualitative evidence.Footnote 63
  6. Without an understanding of the current and future impact of facilities-based entrants, the advice the Bureau can provide regarding the best course of action to remedy potential competition issues in the wireless market is significantly limited. This includes whether it is appropriate to shift to a regulated solution like MVNO access and how to structure and implement such a strategy.
  7. Specifically, the advice the Bureau can provide, beyond its understanding of the market from past reviews, is a study of outcomes in other countries who have mandated MVNO access. A limitation of such an approach is that the specific conditions of Canadian wireless markets may be different from those in other countries. However, an advantage of such an approach is that many countries have implemented different policies with respect to their wireless sectors. This may provide a rich set of experiences from which the CRTC may draw.Footnote 64 The Bureau intends to analyze these experiences in its October submission to the CRTC.

c. Strategies to stimulate competition among facilities-based carriers

  1. While it is unclear whether the best way forward is via a regulatory solution, it is clear that facilities-based competition is unlikely to improve outcomes for Canadians if barriers to entry and expansion prevent or lessen the ability of facilities-based entrants, such as Freedom or Eastlink, to disrupt the coordination between the national wireless carriers.
  2. As such, it is useful to note that there remain promising alternatives apart from purely mandated MVNO access and policies aimed at promoting facilities-based competition. For example, other measures raised by the CRTC include mandating MVNO access on a limited basis (e.g., limited by geography, or access requirements), lowering barriers to entry or expansion, and reducing consumer switching costs. Depending on whether facilities-based entrants are showing promise of disrupting national carriers, these may be more appropriate regulatory interventions to consider.
  3. Positive steps can be taken to accelerate the disruptive effect of new facilities-based competitors. While no single step is likely to radically alter the competitive landscape, it is possible that a deliberate strategy of lowering barriers to entry or expansion as well as reducing consumer costs of switching carriers would all tend to stimulate competition among facilities-based carriers. It may even be warranted to adopt conditional MVNO access in the interim if such a policy was limited in scope, duration, and accessibility and maintained carriers' incentives to invest. A non-exhaustive list of such considerations include the following.

    Conditional MVNO and roaming access
    Both roaming and mandatory MVNO access involve use of a network by a third party. Thus, improved roaming can be viewed as similar to mandatory MVNO access. In that sense, it may also be attractive to consider solutions that spur facilities-based competition by offering some form of access to national carrier networks so long as specific milestones are met (e.g., network build out requirements, subscriber or market share requirements). Ideally, such an approach would lower prices to consumers in the short run and stimulate facilities-based competition in the longer run.
    Improve roaming
    In Canada, new facilities-based entrants do not have national wireless networks. As such, their customers must roam when they leave the coverage zone of their wireless service provider. Ensuring that customers can transition to roaming seamlessly increases the value proposition that new facilities-based entrants can bring to their customers along with the competitive pressure they can put on national wireless carriers.
    Reduce switching costs
    When customers are able to switch among wireless carriers, carriers win more business when they decrease price and lose more business when they raise price. That dynamic increases competition between carriers, which ultimately sends prices to competitive levels. There are numerous steps that can be taken to encourage customer switching and while, the CRTC has adopted a number of these measures to date, there continue to be measures that can be taken. For example, separating the handset purchase from the service plan purchase could encourage switching. The experience of Israel suggests that such costs could be removed by "decoupling" handset costs and wireless plans or requiring that handset installment payments be transferable with a change in plan.Footnote 65
    Structure future spectrum auctions to spur competition
    Perhaps the most significant barrier to providing attractive wireless services is access to spectrum. Available evidence suggests that spectrum holdings are concentrated among the national wireless carriers. For example, one study reports that Bell, Rogers and Telus hold 90% of 700 MHz licenses.Footnote 66 Although the Bureau recognizes that ISED and not the CRTC allocates spectrum, and that other strategies in this regard have been adopted, it may be promising to assess new and innovative ways to structure future spectrum allocations so as to disrupt the status quo in Canada. For example, Israel encouraged the entry of facilities-based competition by promising to refund entrant's payments for spectrum provided certain market share and population coverage thresholds were met.Footnote 67
    Standardize access to infrastructure for 5G
    One unavoidable feature of 5G technology is that it requires significantly more access to public and private infrastructure for antennae and associated back-haul than 4G. Thus, to the extent that access to infrastructure has been a barrier to entry and expansion in the past, that barrier is likely to strengthen significantly in the near future. Standardizing hardware components and potentially mandating access to certain types of infrastructure are all steps that would reduce barriers to developing a 5G network.

V. Conclusion

  1. The Bureau is pleased to respond to the CRTC's Call for Comments. The CRTC's decisions in this proceeding will be of great importance for Canada's economy as well as for Canadian consumers—especially in light of the upcoming transition to 5G network technology.
  2. As described herein, it appears that concerns regarding an exercise of market power in Canadian wireless markets are merited and further action may be warranted.
  3. It seems clear that competitive pressures are currently insufficient to restrain the exercise of market power in Canada. However, it is possible that facilities-based competitors will, in the future, change the status quo so that Canadians enjoy the benefits of greater competition in wireless markets, including lower prices, higher quality service and greater innovation.
  4. While mandated MVNO access may be a warranted next step, there are both potential benefits and potential risks of regulatory intervention.
  5. Further information is needed to assess whether mandated MVNO access, or the implementation of additional strategies to eliminate the remaining barriers to entry in Canadian wireless markets and stimulate facilities based competition, is the preferable approach.

VI. Appendices

Appendix A

Figure 10: Visual depiction of price differences across regions in Canada presented to CRTC

  • Figure 10: Visual depiction of price differences across regions in Canada presented to CRTCFootnote 68
    Visual depiction of price differences across regions in Canada presented to CRTC
    1 GB Data Plan Price
    * Bell and Rogers only off 2 GB plan in Quebec for $75 a month
    ** Rogers does not offer 1 GB plan in Saskatchewan, Manitoba and Thunder Bay.
    Province Rogers Bell TELUS MTS Sasktel Tbaytel
    British Colombia $85 $85 $85 - - -
    Alberta $85 $85 $85 - - -
    Saskatchewan - $55 $55 - $60 -
    Manitoba - $55 $55 $55 - -
    Ontario $85 $85 $85 - - -
    Thunder Bay - $60 $60 - - $60
    Quebec - - - - - -
    Maritimes $85 $85 $85 - - -
    Visual depiction of price differences across regions in Canada presented to CRTC
    Max Data Plan Prices (~10 GB, Unlimited)
    * Bell and Rogers Quebec Rate for 12 GB
    ** Tbaytel and Bell rates for 12 GB in Thunder Bay area
    *** MTS rate in Manitoba for unlimited
    Province Rogers Bell TELUS MTS Sasktel Tbaytel
    British Colombia $145 $145 $145 - - -
    Alberta $145 $145 $145 - - -
    Saskatchewan $75 $75 - - $70 -
    Manitoba $75 $75 $75 $75 - -
    Ontario $145 $145 $145 - - -
    Thunder Bay - $85 - - - $85
    Quebec $110 $110 $115 - - -
    Maritimes $145 $145 $145 - - -

Appendix B

Figure 11: Rogers pricing for an 8GB* plan by province

  • Figure 11: Rogers pricing for an 8GB* plan by provinceFootnote 69
    Rogers pricing for an 8GB* plan by province
    * Saskatchewan plan includes 10GB
    Province Rogers
    New Brunswick $115
    Nova Scotia $115
    PEI $115
    NFLD $115
    British Columbia $120
    Alberta $120
    Ontario $120
    Quebec $62
    Saskatchewan $65
    Manitoba $60

Figure 12: Telus pricing for a 4GB* plan by province

  • Figure 12: Telus pricing for a 4GB* plan by provinceFootnote 70
    Telus pricing for a 4GB* plan by province
    * Manitoba plan includes 6GB, Saskatchewan includes 5GB
    Province Telus
    New Brunswick $95
    Nova Scotia $95
    PEI $95
    NFLD $95
    British Columbia $95
    Alberta $95
    Ontario $95
    Quebec $60
    Saskatchewan $60
    Manitoba $55

Appendix C

Figure 13: Plan cost of a Bell 10GB* plan vs. Bell network quality by province

  • Figure 13: Plan cost of a Bell 10GB* plan vs. Bell network quality by provinceFootnote 71
    Plan cost of a Bell 10GB* plan vs. Bell network quality by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Telus includes 12GB
    ** Network Quality is PC Mag’s rating from the largest city in the respective Province
    Province Network Quality** Total plan cost
    Newfoundland and Labrador 97.00 $110.00
    Prince Edward Island 99.00 $110.00
    Nova Scotia 96.00 $110.00
    New Brunswick 87.00 $110.00
    Quebec 94.00 $75.00
    Ontario 97.00 $110.00
    Manitoba 87.00 $65.00
    Saskatchewan 86.00 $60.00
    Alberta 95.00 $110.00
    British Columbia 93.00 $110.00

Figure 14: Plan cost of a Rogers 10GB* plan vs. Rogers network quality by province

  • Figure 14: Plan cost of a Rogers 10GB* plan vs. Rogers network quality by provinceFootnote 72
    Plan cost of a Rogers 10GB* plan vs. Rogers network quality by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Telus includes 12GB
    ** Network Quality is PC Mag’s rating from the largest city in the respective Province
    Province Network Quality** Total plan cost
    Newfoundland and Labrador 75.00 $105.00
    Prince Edward Island 70.00 $105.00
    Nova Scotia 75.00 $105.00
    New Brunswick 70.00 $105.00
    Quebec 91.00 $75.00
    Ontario 88.00 $110.00
    Manitoba 82.00 $65.00
    Saskatchewan 99.00 $65.00
    Alberta 89.00 $110.00
    British Columbia 91.00 $110.00

Figure 15: Plan cost of a Telus 10GB* plan vs. Telus network quality by province

  • Figure 15: Plan cost of a Telus 10GB* plan vs. Telus network quality by provinceFootnote 73
    Plan cost of a Telus 10GB* plan vs. Telus network quality by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Telus includes 12GB
    ** Network Quality is PC Mag’s rating from the largest city in the respective Province
    Province Network Quality** Total plan cost
    Newfoundland and Labrador 99.00 #N/A
    Prince Edward Island 95.00 $110.00
    Nova Scotia 97.00 $110.00
    New Brunswick 98.00 $110.00
    Quebec 99.00 $75.00
    Ontario 99.00 $110.00
    Manitoba 99.00 $75.00
    Saskatchewan 88.00 $75.00
    Alberta 100.00 $110.00
    British Columbia 99.00 $110.00

Appendix D

Figure 16: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. average age by province

  • Figure 16: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. average age by provinceFootnote 74
    Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. average age by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
    Province Average Age Average plan cost
    Newfoundland and Labrador 43.7 $108.33
    Prince Edward Island 42.7 $108.33
    Nova Scotia 43.5 $108.33
    New Brunswick 43.6 $108.33
    Quebec 41.9 $75.00
    Ontario 41 $110.00
    Manitoba 39.2 $68.33
    Saskatchewan 39.1 $66.67
    Alberta 37.8 $110.00
    British Columbia 42.3 $110.00
    Yukon 39.1 $110.00
    Northwest Territories 34.9 $110.00

Figure 17: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. % of population with postsecondary by province

  • Figure 17: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. % of population with postsecondary by provinceFootnote 75
    Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. % of population with postsecondary by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
    ** 2016 Census data
    *** For plans offered between 10-13GB; in the case where a provider offers two plans within this bracket, the lower of the two was selected (e.g. a 10GB plan would selected in favor of a 13GB plan)
    Province % with Postsecondary** Average plan cost***
    Newfoundland and Labrador 52% $100.71
    Prince Edward Island 54% $101.43
    Nova Scotia 55% $101.43
    New Brunswick 49% $100.71
    Quebec 59% $65.99
    Ontario 55% $98.57
    Manitoba 48% $65.75
    Saskatchewan 49% $66.60
    Alberta 55% $98.57
    British Columbia 55% $98.57
    Yukon 60% $107.00
    Northwest Territories 51% $107.00

Figure 18: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. unemployment rate by province

  • Figure 18: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. unemployment rate by provinceFootnote 76
    Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. unemployment rate by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
    ** 2016 Census data
    *** For plans offered between 10-13GB; in the case where a provider offers two plans within this bracket, the lower of the two was selected (e.g. a 10GB plan would selected in favor of a 13GB plan)
    Province Unemployment rate** Average $/GB***
    Newfoundland and Labrador 15.6 $9.45
    Prince Edward Island 12.3 $9.51
    Nova Scotia 10 $9.51
    New Brunswick 11.2 $9.45
    Quebec 7.2 $6.06
    Ontario 7.4 $9.13
    Manitoba 6.7 $6.03
    Saskatchewan 7.1 $6.44
    Alberta 9 $9.13
    British Columbia 6.7 $9.13
    Yukon 9.2 $10.15
    Northwest Territories 10.6 $10.15

Figure 19: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. median income by province

  • Figure 19: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. median income by provinceFootnote 77
    Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. median income by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
    Province Median Income Average plan cost
    Newfoundland and Labrador $31,528 $108.33
    Prince Edward Island $26,851 $108.33
    Nova Scotia $29,979 $108.33
    New Brunswick $29,124 $108.33
    Quebec $31,263 $75.00
    Ontario $33,946 $110.00
    Manitoba $33,677 $68.33
    Saskatchewan $36,612 $66.67
    Alberta $42,679 $110.00
    British Columbia $31,713 $110.00
    Yukon $43,341 $110.00
    Northwest Territories $53,161 $110.00

Appendix E

Figure 20: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. population density based on weighted metropolitan areas and agglomerations by province

  • Figure 20: Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. population density based on weighted metropolitan areas and agglomerations by provinceFootnote 78
    Average plan cost of a Bell, Rogers and Telus 10GB* plan vs. population density based on weighted metropolitan areas and agglomerations by province
    * All Quebec plans include 12GB, Manitoba plans from Bell and Rogers include 12GB, and the Saskatchewan plan from Rogers includes 12GB
    ** 2016 Census data
    *** For plans offered between 10-13GB; in the case where a provider offers two plans within this bracket, the lower of the two was selected (e.g. a 10GB plan would selected in favor of a 13GB plan)
    Province Population Density ppl/km^2
    (Combined CMA's)**
    Average plan cost***
    Newfoundland and Labrador 61.00 $108.33
    Prince Edward Island 85.07 $108.33
    Nova Scotia 45.50 $108.33
    New Brunswick 19.16 $108.33
    Quebec 182.84 $75.00
    Ontario 216.77 $110.00
    Manitoba 106.54 $68.33
    Saskatchewan 38.60 $66.67
    Alberta 33.61 $110.00
    British Columbia 56.52 $110.00
    Yukon 3.32 $110.00
    Northwest Territories 185.54 $110.00

Appendix F

Figure 21: Bell pricing in Ontario

  • Figure 21: Bell pricing in OntarioFootnote 79
    • A screenshot from Bell&rsquo;s website of Bell Mobile sharable plans. This is a selection process consisting of three steps:
    • Step 1: Select the type of phone you are interested in, there are four options:
      • Bring your own phone or buy one at full price
      • Smartphone: choose a mid-tier or previous-genereation premium smartphone. Examples: Samsung Galaxy A5, iPhone SE and LG Q6
      • Premium Smartphone plan: Get a premium smartphone and pay less on your monthly plan. Requires a minimum of 1 GB of data on the account. Examples: Samsung Galaxy SS, iPhoneX and Google Pixel 2.
      • Premium Smartphone Plus plan: Get a premium smartphone and pay less up front. Requires a minimum of 1 GB of data on the account. Examples: Samsung Galaxy SS, iPhoneX and Google Pixel 2.
        • A selection is needed to see further pricing, bring your own phone is selected in this scenario
    • Step 2: Select the voice options, there are three options (all of which include unlimited text, picture and video messages):
      • Bring your own Device Share plan – Unlimited Canada &amp; US calling, this option is $70 per month
      • Bring your own Device Share plan – Unlimited Canada calling, this option is $60 per month. There is an additional graphic stating this is the most popular option
      • Bring your own Device Share plan – Unlimited local calling, this option is $55 per month
    • Step 3:Select the amount of data needed, there are six options:
      • 1GB of shareable data, this option is $25 per month
      • 2GB of shareable data, this option is $30 per month
      • 4GB of shareable data, this option is $45 per month. There is an additional graphic stating this is the most popular option
      • 6GB of shareable data, this option is $55 per month
      • 10GB of shareable data, plus 2GB of bonus data (as a new customer promotion), this option is $70 per month
      • 15GB of shareable data
    • Adding the prices of step 2 and step 3 would give your monthly bill, not including taxes and any additional fees.

Figure 22: Bell pricing in Ontario

  • Figure 22: Bell pricing in OntarioFootnote 80
    • A screenshot from Bell&rsquo;s website of Bell Mobile sharable plans, similar to figure 21. This figure shows the last two steps of the plan selection process. The voice option -Unlimited Canada calling for $60 per month is selected here. The only remaining step is selecting the amount of data, there are four visible options (the page is cut off):
      • 1GB of shareable data, this option is $25 per month; the plan total would be $85 per month not including taxes and any additional fees.
      • 2GB of shareable data, this option is $30 per month; the plan total would be $90 per month not including taxes and any additional fees.
      • 4GB of shareable data, plus 1GB of bonus data (as a new customer promotion), this option is $45 per month; the plan total would be $105 per month not including taxes and any additional fees. There is an additional graphic stating this is the most popular option
      • 6GB of shareable data, plus 2GB of bonus data (as a new customer promotion), this option is $60 per month; the plan total would be $120 per month not including taxes and any additional fees.

Appendix G

Figure 23: Plan pricing of a 10GB plan by provider and provinceFootnote 81
Province Bell Rogers Telus Virgin Mobile Koodo Fido Freedom
Yukon $110 $110 $110 $120 $85 $- $-
Northwest Territories $110 $110 $110 $120 $85 $- $-
Nunavut $110 $110 $110 $120 $85 $- $-
Nova Scotia $110 $105 $110 $120 $85 $90 $-
Prince Edward Island $110 $105 $110 $120 $85 $90 $-
Newfoundland and Labrador $110 $105 $110 $120 $85 $90 $-
New Brunswick $110 $105 $110 $120 $85 $90 $-
Ontario $110 $110 $110 $120 $85 $90 $65
Alberta $110 $110 $110 $120 $85 $90 $65
British Columbia $110 $110 $110 $120 $85 $90 $65
Quebec $75 $75 $75 $56 $56 $56 $-
Saskatchewan $60 $65 $75 $- $- $58 $-
Manitoba $65 $65 $75 $- $- $58 $-
Date modified: