Why is my cellphone bill so expensive?

The next time you get your cell phone bill, remember that Canada is known for having some of the most expensive cell phone plans in the world. Innovation, Science and Technology Canada is a government body that has been tracking cell phone services for years. The good news is that some rates are coming down, thanks to smaller carriers like Koodo and Freedom Mobile. The bad news is that we still sit at the bottom of the list in terms of affordability. 

A simple talk and text plan in Canada averaged out to $39.43 in 2018, while in Italy it is only $11.86. Comparisons to other countries are often challenged by the Bell, Rogers and Telus’s of the world, their reason being that Canada is bigger geographically with more people concentrated in major cities, while Italy is smaller and densely populated throughout. The issue is, if geography and population impacted cellular costs, places like Australia, which has about the same population density as Canada, would have similar cellular costs. The reality is that Australia has cheaper cell phone packages overall, which means that the size of the country and the population density alone do not explain Canada’s high service rates.

In truth, there are a handful of companies that control 90 per cent of the telecommunications business in Canada. Rogers, Bell and Telus have no incentives to provide better services or lower their prices. These companies have cornered the industry and continue to convince our federal government to protect them from foreign competition. In Saskatchewan there is SaskTel, a government-owned regional cellular provider that delivers significantly lower rates. Shaw owns Freedom Mobile’s services and there are a few other companies that offer budget plans, but there is little else on the market that serves as an independent, cost-effective service provider.

It used to be more common to have government-run telephone companies, and these companies regulated prices to protect consumers. Since the 1990’s there have been many mergers and privatizations that led to government-owned cellular companies being absorbed by the three larger private conglomerates. Telus was made from a merger of BCTel, the main phone provider in British Columbia, and AGT, the government-owned phone provider that was based out of Alberta.

What would help consumers would be bare bone services with price caps, to make access to basic cellular plans more affordable for everyone, with other plans available for those who want and can afford upgrades. There is little benefit to the average person to hand over the monopoly to private phone companies when these outfits do not acknowledge their obligation to provide basic services for the majority of Canadians. It might be time to think of the internet and cellular services in the same way that we look at water and electric services. National service structures ensure that basic needs are met and that the prices can be regulated better. Many countries have national carriers that are owned or operated through their governments, maybe it’s time that we rethink private ownership when cellular plans are a service that most of us need.

Source: https://www.ic.gc.ca/eic/site/693.nsf/eng/00169.html#a06 

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