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In December 2020, the Canadian Radio-Television and Telecommunications Commission (CRTC) released its annual Communications Monitoring Report (CMR).¹ Using data from 2019, the 2020 CMR shows that Canadians are continuing to use mobile wireless services more than ever while the cost of service plans continues to decrease year over year. Meanwhile, Statistics Canada reports that mobile wireless plan prices have decreased by 15% in 2020.

CRTC Communications Monitoring Report 2020

According to the CMR, in 2019, almost 60% of mobile subscribers had a mobile service plan with 5GB or larger of mobile data, compared to 40% the year prior. The average monthly data used by subscribers who had a data plan increased by almost 20% over the same period (2.9 GB in 2019 vs 2.5 in 2018). With the national wireless carriers introducing unlimited data plans in the summer of 2019 ², we expect that the number of subscribers with mobile data plans of 5GB or greater, as well as the average monthly data usage per subscriber, will continue to grow.

While usage has increased, the CMR shows that service plan prices continued to decline in 2019.  As the chart below shows, the price of plans surveyed by the CRTC has declined by an average of 37% from 2016-2019.  In 2018, the CRTC concluded that there was a need for lower cost plans for Canadians that require only small amounts of mobile data. As the CMR shows, the wireless industry responded, with average price for plans with unlimited talk/text and 1GB of mobile data declining by over 25% in 2019.

Average of lowest reported prices ($/month) for mobile services (region: Canada), 2016-2019
	2016	2017	2018	2019	Drop 2016-2019	Drop 2018-2019
No data, 150+ min, no SMS	$31.44	$25.76	$24.89	$19.96	-36.51%	-19.81%
1GB, any min, any SMS	$48.88	$46.53	$39.10	$29.03	-40.61%	-25.75%
2GB, 1200+ min, 300+ SMS	$61.71	$52.92	$44.86	$39.86	-35.41%	-11.15%
5GB, ∞min, ∞SMS	$77.47	$70.06	$50.89	$48.82	-36.98%	-4.07%
10GB, ∞min, ∞SMS	N/A	N/A	N/A	$65.50
Average:	$54.88	$48.82	$39.94	$34.42	-37%	-14%

*Based on lowest non-promotional prices.

Statistics Canada: Cellular Services Price Index

While the CMR relies on data from 2019, more recent data shows that the cost of mobile wireless services continued to decline in 2020. For example, while Statistics Canada data shows that the price of many goods and services continues to increase, its Cellular Services Index shows that the price for cellular services has declined 15% in 2020. ³

Sustainable Competition – Quality, Coverage and Affordability

How can this downward trend in prices be explained? Over the past several years, governments from different political parties have pursued policies that encourage competition amongst the companies that invest in building our wireless networks, most commonly referred to as facilities-based competition. These policies include fostering the introduction of new regional facilities-based carriers that have played an important role in providing additional competition and contributing to the downward trend in prices. In short, facilities-based competition is working.

But increasing affordability is not the only measure of policy success. Canada’s facilities-based carriers are also competing against one another to have the fastest speeds, widest coverage, and most reliable services. This vigorous competition has resulted in more than $70 billion being invested in wireless infrastructure and spectrum by these network operators. The result: in May 2020, independent network analyst, Opensignal, ranked Canada has having the fastest average mobile download speeds in the world; 287% faster than the global average and 123% faster than the United States. ⁴

Performance and availability is not restricted to urban areas. In a study of more than 100 countries, Opensignal found that rural network speed and availability in Canada topped most other countries. ⁵ Nevertheless, continued high levels of private sector investment are required to continue to expand network coverage and roll-out the next generation of wireless technology, 5G.

Maintaining Momentum – Investing in Digital Infrastructure

Unfortunately, some have chosen to ignore the success of facilities-based competition in producing high quality and broadly available networks while also driving down prices.  Instead, they cater to misconceptions about Canada’s wireless industry that are based on misguided international comparisons and promote dangerous policies, such as mandated mobile virtual network operator (MVNO) access.

An MVNO is an entity that does not invest in building its own wireless network infrastructure or acquiring wireless spectrum. Instead, they use the network facilities of the facilities-based wireless carriers to resell these services to their customers.

MVNOs are not inherently bad, as wireless carriers in Canada have voluntarily granted network access to MVNOs based on mutually-agreed terms. However, forcing wireless carriers to allow MVNOs to use their networks, especially at rates that are less than those negotiated in a normal mutually-agreed upon transaction, would have profound negative impacts on wireless carriers ability to expand wireless services to all Canadians, including the deployment of 5G.

Consulting firm, PWC, estimates that a broad MNVO network access mandate would result in annual reductions of $5 billion and $3 billion in operating and capital expenditures, respectively. ⁶ It further estimates that an MVNO mandate would reduce the effective coverage of 5G in Canada by 2030 from 95% to 75%, and result in a cumulative loss to Canada’s economy of at least $57 billion in GDP. ⁷

We cannot let that happen. The COVID-19 pandemic has highlighted the importance of telecommunications services to sustaining economic and social activity. It has also reinforced the need for significant investment to ensure that all Canadians can have access to the internet and mobile services.

Recognizing this need, both the federal and provincial governments are making funds available to complement private sector investments in digital infrastructure. It makes little sense to adopt policies, such as mandated MVNO network access, that go against the clear need and government policy direction of encouraging more investment, both public and private, in digital infrastructure.

Facilities-based competition has made Canada a world leader in wireless, and because of increasing competition among national and regional facilities-based wireless providers, prices are steadily decreasing. We must maintain this momentum and keep the policies that will encourage ongoing investment in Canada’s future.

¹ https://crtc.gc.ca/eng/publications/reports/policymonitoring/2020/index.htm

² Unlimited plans had been introduced earlier by regional providers such as Freedom Mobile and Sasktel.  Unlimited plans refer to plans that offer a large allotment of high speed data (e.g. 10GB or more per month) with no overage charges, but reduced speeds, for data usage beyond the monthly allotment.

³ The Cellular Services Index and CMR price study use different methodologies. See index at https://bit.ly/2YsIvgw

⁴ The state of mobile network performance 2020: One year into the  5G era – Opensignal, May 2020

⁵ The state of rural Canada’s Mobile Network Experience – Opensignal, May 2020

⁶ Understanding the likely impacts of MVNOs in Canada: Part 1, July 2020.

⁷ Understanding the likely impacts of MVNOs in Canada: Part 2, July 2020.