The chief executives of Canada’s three largest telecommunications companies emphasized falling phone and internet prices, rising data usage and the cost of high-frequency bands during an appearance before MPs on Monday. may be part of the reason why Canadians are not feeling well.
Three CEOs, Tony Staffieri of Rogers Communications, Mirko Bibic of BCE, and Darren Entwistle of Telus, attended the House of Commons Industry Committee meeting virtually.
Committee members voted unanimously last month to subpoena the three to testify after a previous invitation to the chief executives resulted in representatives from other companies attending instead.
The commission studies the accessibility and affordability of wireless and broadband services. The issue came to the forefront in January when Rogers admitted to raising the average price of some wireless customers by an average of $5 for some wireless customers without a contract.
Mr Staffieri was pressed on the issue on Monday, with Liberal MP Francesco Sorbara suggesting the move was “tone deaf”.
“Are you willing to admit that the timing wasn’t right?” he asked.
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Staffieri responded that only customers with traditional plans would be affected by the price increase.
“It was important to us to make sure these customers had options,” he said.
“With just two clicks, you can access the plans on the market that offer the best value for money for your situation.”
Conservative MP Ryan Williams questioned Bibik and Entwistle about whether Bell and Terrace would increase their prices in response to Rogers’ increase.
Bibic insisted Bell is also focused on cutting costs and wouldn’t say whether Bell plans to follow suit, but Entwistle remains confident Canadians will see lower prices. “We’re not going to discuss pricing in a forum where our two competitors are in a good position,” he said. here. “
CEOs say wireless prices are coming down
Some members of the committee have expressed concerns about cell phone and internet prices in Canada, arguing that Canadians pay too much for these services.
But the CEOs cited recent data from Statistics Canada showing wireless prices have fallen 16 per cent in the past year and 47 per cent in the past five years.
“If you look at Canada alone from 2019 to 2024, we’re offering in some cases 10 times more data for $40 less per month,” Bibic said.
“We’re seeing a significant decline.”
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Mr. Entwistle said part of the reason some Canadians are seeing their telecom service prices go up is due to a “significant increase in data consumption.” He said major companies are offering Canadians bigger plans than ever before because Canadians are “one of the biggest consumers of data in the world.”
“If you mathematically cut the cost in half, but the user uses twice as much data as before, historically, the cost will appear to be the same to the user,” he said.
Mr Entwistle added that the “missing” element in this conversation was around the cost of the physical phone itself, which he said could account for nearly half of the overall mobile phone bill.
“That’s an area where we have no control over the economy,” he said.
“Ultimately, the economics are determined by the device manufacturer.”
The three chief executives also told the committee that Canada pays the highest amount in the world for its radio spectrum (the electromagnetic frequencies that enable smartphone communications), making it more expensive to operate. Ta.
Average revenue per user is increasing, lawmakers say
Last November, Canadian wireless companies spent a total of about $2.1 billion for a piece of 5G bandwidth in the federal government’s latest spectrum auction. At the time, experts said the cost of spectrum to carriers could lead to higher prices for mobile phones as companies recoup their investments.
Entwistle said spectrum fees accounted for $100 of every Canadian’s annual wireless phone bill in 2021.
“This fee reflects the fact that Canadian wireless operators have historically paid the highest price for spectrum through successive spectrum auctions around the world,” he said.
“I would argue that this is a significant part of our cost base and is inconsistent with our policy of trying to improve affordability.”
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Bibic added that if the spectrum prices charged by the Canadian government followed global averages, “every Canadian’s wireless bill would be $5 a month cheaper.”
But Conservative MP Rick Perkins suggested the blame also lay with the companies themselves. He said Rogers’ quarterly earnings reports frequently “boast annual increases in average revenue per user.”
“That’s why Canadians feel like they’re paying more because Canadians are charging more,” he said in a conversation with Staffieri.
“Average revenue per user is not the same as price,” Staffieri responded, noting that it is “an accounting metric and also includes services that customers can choose to add.”
“And in just four years, your price has gone from $50.75 in 2020 to almost $60 today,” Perkins said.
