It is a common perception that Canada has one of the highest wireless fees in the world. As a result, wireless penetration rate in Canada is only 62%, which is one of lowest in developed countries. Contrary to this common perception, Canadians enjoy one of the lowest wireless fees in the world through wireless retention plans from the Big Three (Bell, Rogers and Telus). I am going to discuss this using an OECD report on developed countries’ cell phone fees.
Methodology for OECP Report
OECD divides cell phone users into three groups: low, medium, and high usage. Voice minutes, text messages (SMS), and multimedia messages (MMS) are considered. The number of services is arbitrarily defined on annual usage. Important usage information is listed in Table 1 and is taken from here.
[table id=12 /]
Low Usage Comparison
Prepaid is fairly expensive in Canada. I will use SpeakOut Wireless in my analysis, since I determined it offers one of the best prepaid cell phone services in Canada.
Costs of SpeakOut Wireless using OECD low usage definitions:
- Local Voice Minutes: 529 * $.20 = $105.80
- National Voice Minutes (7% of calls are assumed national): 527 * .07 * $.16 = $5.90
- SMS (SpeakOut Wireless charges $.04 for incoming and outgoing messages. To simplify things, I assume that for every outgoing text message, there is one incoming text message): 396 * ($.04 + $.04) = $31.68
- MMS: Not available on SpeakOut Wireless to the best of my knowledge.
- Fixed Charges (911 fee of $.79 a month): 12 * $.79 = $9.48
- Total Cost: ($105.80 + $5.90 + $31.68 + $9.48)* 1.13 = 172.73 (5% GST, 8% PST)
OECD is estimation for low usage in Canada is $195.68 and Canada ranks 20th in terms of lowest cost in the 30 countries low usage comparison. My own calculation by using SpeakOut Wireless suggests that OECD’s calculation is representative for Canada. If my calculation is used instead OECD’s calculation, Canada would rank 19th in the low usage comparison. I conclude that Canada needs to have better prepaid options for people with low usage.
Medium Usage and High Usage
Here is where I would disagree with OECD methodology of calculating Canadian wireless fees. OECD used retail wireless plans in Canada, but in reality, most Canadians are able to get wireless retention plans from the Big 3 after a year of contract with any one of them or through retail promotions that occur once or twice a year.
[table id=13 /]
As seen from Table 2, a standard retention plan covers OECD medium usage and high usage definition. Annual total cost of this standard retention plan is $372.22.
Medium Usage Analysis
According to OECD’s medium usage analysis, Canada ranks 27th out of 29 countries in this section. If my calculation is used, Canada would rank 21th out of 29 countries. There is a big difference depending on the methodology used and it could be argued that there need to be better medium usage plans.
High Usage Analysis
According to OECD’s high usage analysis, Canada ranks 19th out of 30 countries in this section. If my calculation is used, Canada would rank 10th out of 30 countries. I believe this is the evidence that Canadian wireless fees are one of lowest in developed countries rather than the highest. Canadian retention plans have more features and are cheaper than US retail and retention plans. I believe that the high usage analysis is the most important and this is the category that most Canadian wireless users fall into.
If OECD introduces an ultra high usage comparison, I assume Canadian wireless cost based on retention plans would be among the top 5 in developed countries.
Canadian long distance can be very expensive, but retention plans usually come with either 100 or 1000 Canadian long distance minutes. In fact, there are Canadian long distance and North American long distance unlimited calling packages from retention departments. Canadian long distance should not be an issue on retentions, but Canadian long distance can be a real issue on regular retail plans.
Retention plans are really great and I use about 1000 to 2000 minutes and 100 text messages a month without any overages. It is possible to use even more minutes and text messages, but it needs to be used within the provisions of the retention plan like 6pm unlimited early evenings, unlimited network calling, unlimited incoming, or unlimited calling to 5 numbers. If you do not have a retention plan right now, do call in and ask for the retention department. It is very likely that you will be given a retention plan by just asking nicely.
Photo Credit: nutmeg15