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Who's getting better cell phone data prices than Canada? Almost everyone

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When it comes to cellphone data, Canadians know they’re paying more than those in most other nations.

What might surprise them is just how much more they’re paying.

A recent survey completed by the British service comparison website Cable.co.uk, ranked Canada 209 out of 228 countries and territories surveyed for the lowest average cost of one gigabyte of data.

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The survey found, on average, Canadians pay $12.55 for a gigabyte of data (all prices are in U.S. dollars unless otherwise stated), ranging from as little as $2.40 and as much as $99 per gig.

By comparison, the median price for the entire list was $3.24 per gigabyte. The top 10 countries in the world all pay less than 60 cents on average for a gigabyte of data. The top 100 all pay less than $2.50.

The cheapest data plans are in India, where its 1.35 billion citizens pay an average of nine cents per gigabyte, a 99.3-per-cent discount off the Canadian price.

No. 2 on the list is Israel, with its 8.8 million citizens paying 11 cents per gigabyte. Kyrgyzstan, Italy and Ukraine round out the top five.

It appears there’s little rhyme or reason when it comes to cellphone prices across the world. Tiny Caribbean nations can be found near both the top of the list (Dominican Republic, 74 cents per gigabyte) and the bottom (Cayman Islands, $23.05).

The same is true for Africa. Sudan (63 cents), which ranks 13th on the list, shares a border with Chad ($23.33), which is 221st.

Telecom companies have argued Canada’s vast geography adds to the cost of delivering the network, but many countries with low population density comparable to Canada’s, such as Russia (52 cents) and Mongolia (74 cents), rank near the top.

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What’s more, prices are dropping in most developed countries. Canada was the only G7 nation that saw its average price per gigabyte rise in 2020, according to the study, which also looked at numbers in 2019.

Australia, which also has a population spread over a wide geographic area, averages just 68 cents per gigabyte. So how has a country with a small population spread over a wide geographic area managed to deliver cellphone services at a fraction of the cost in Canada?

U.K. telecoms journalist Jamie Davies said there’s no simple answer to that question but, in general, a country’s data prices are tied to three main things: cost of deploying a network, competition in the market and the market tolerance for paying higher prices.

It’s the third factor he feels is often overlooked. He said prices in the U.K. are a fraction of what people in Canada and the U.S. pay. He thinks part of the reason Canadians and Americans pay more is because they’re used to paying more. They’ve never known anything different because no disruptors have come into those markets.

“If you started charging the same data rates (in the U.K.), the consumers here would be outraged,” he said. “So you’ve got to judge how wealthy that population is but, also, how tolerant are their wallets for paying more?”

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Davies said Australians were already primed for lower prices because the country had a nationalized broadband network. Smaller companies, called mobile virtual network operators (MVNOs), are able to purchase a piece of the network and sell it to consumers. These MVNOs help generate competition by offering specialized discount plans.

Mark Goldberg, a Canadian telecommunications consultant, agrees Australia’s nationalized network has helped lower prices, but says it’s not that simple.

He said consumers may not be paying for it on their cellphone bills, but they are paying for it elsewhere on their tax bills. The national network came with a price tag of AUD$55 billion.

Goldberg also believes the Cable.co.uk study’s methodology is flawed. After drilling down into the data, he’s curious how Canada’s most expensive plan jumped from $60.37 in the fall of 2019 to $99.68 in June 2020.

He said he believes that lone outlier inflated the average price. The average person is not paying $100 per gigabyte when there are unlimited data plans available for $50, he added.

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“It’s just not plausible that prices have increased — that’s simply a sampling error,” he said.

“More than anything, it’s a demonstration of the challenge of doing international comparison.”

Crunching the numbers across countries can be difficult, given the vast differences in plan availability, fees, taxes and regulations. The federal government admits as much in its own 2019 foreign jurisdiction price comparison.

That report shows that any way you cut it, Canadians are paying more than other G7 countries, with the exception of Japan in certain cases, for wireless service packages.

In a March 5 news release, Navdeep Bains, federal minister of innovation, science and industry, said the government expects the big three carriers — Bell, Telus and Rogers — to lower prices by 25 per cent in the next two years on cellphone plans that include two to six gigabytes of data.

The big carriers say they’ve already done a price decrease. In an email, a spokesperson for the Canadian Wireless Telecommunications Association (CWTA) cited an Innovation, Science and Economic Development Canada report that showed price declines in 2019 of 25 per cent on five-gigabyte plans.

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However, Laura Tribe, executive director of internet advocacy group OpenMedia, said we don’t need another study or comparison to tell us prices are too high.

“The thing that’s really frustrating right now,” she said, “is just how critical internet and communications tools are in a pandemic when you’re encouraging people to stay home, social distance, work from home, do schooling from home.”

She said her group has been calling on the Big 3 service providers to lift data caps during the pandemic.

While many people are working from home and using WiFi, that has freed up available bandwidth so those who really need to use data could rely on wireless networks.

“That cost is such a higher barrier when you don’t have other options,” said Tribe. “You can’t just go to your school or the library. Now, if you don’t have your device, what do you do?”

Despite the federal government’s promise to lower prices by 25 per cent, there is no magic bullet. From his vantage point in the U.K., Davies said Canada could use a fourth player in the market, but specifically one that wants to act as a disruptor.

He said the British telecom company Three shook up the established industry in the U.K. when it launched, and in Italy, smaller regional companies have found success while increasing competition and driving down prices.

“Bring in more competition and enable that competition to survive,” said Davies. “That doesn’t mean offering them tax breaks. It means offering them incentives that when money is spent, it can be supported through low-interest loans.“

brthomas@postmedia.com

Twitter: @brodie_thomas

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