Canadian mobile services top G7 affordability ranking

  • National Newswatch

Contradicting the popular narrative, a recent set of reports from PwC Canada puts Canadian unlimited mobile wireless plans atop affordability rankings among the G7 countries plus Australia.In December, PwC released “Understanding wireless affordability in Canada” [pdf, 4MB] and earlier this week, it released an addendum, “Impact of unlimited data plans on affordability” [pdf, 1.6MB]. According to the reports, “unlimited plans represent a significant increase in value for the average Canadian consumer. By 2020, price paid per GB of data is estimated to decline by 50% compared to 2018 levels, and by 38% compared to 2019 levels.”PwC says that Canadian consumers are getting access to the top ranked unlimited data plans among the G7 countries plus Australia, based on four key dimensions measuring user experience: speed; latency; price per GB; and, access. According to PwC, “Canada performs consistently well across these key dimensions, and performs particularly well on speed.”PwC's December affordability study was motivated by consideration of the 7.7% annual growth in Canadian household expenditures on wireless devices and services (between 2010 and 2017) versus much lower increases in disposable income. To provide a holistic view of wireless affordability in Canada, this report examined a number of aspects related to the overall affordability of consumer wireless in Canada, including:The changing pattern of household expenditures, as wireless data use is enabling a different delivery of products and services – including the substitution of select historic spend categories by wireless. The assessment of wireless affordability in Canada, as measured by recognized affordability metrics. The affordability of wireless services for Canadians in proportion to their income relative to other jurisdictions.Among the results, PwC found that wireless expenditures have reduced spending on such items as landline phone, postal, and photo products and services, as well as audio, video and printed reading materials. In addition, citing ride sharing and alternative accommodation services, PwC says wireless services have “been instrumental in the growth of a number of new businesses that have directly or indirectly improved access, reduced search costs and enhanced choices for the Canadian consumer.”PwC found that, as mobile video and social media usage increased, the average spend per gigabyte of data consumed dropped at a compound annual rate of nearly 26% between 2014 and 2017. “These trends indicate that value for money from the wireless expenditure increased.”As evidence that wireless expenditures did not impose an unreasonable burden, PwC's observed that across every income quintile, recreational expenditures increased faster than the total expenditures (non-discretionary, wireless, and discretionary expenditures). “It is evident that wireless expenditure did not impose an unreasonable burden on the average Canadian household's non-discretionary expenditure across income quintiles”. Further, PwC measured affordability against the target threshold from the Alliance for Affordable Internet (A4AI) and found the threshold was met across all income quintiles in 2018.For the purpose of international benchmarking, PwC compared Canada to the US, Australia and the UK. It found that an average Canadian household spent 1.6% of its disposable income on wireless, less that what was spent by an average US household or Australian household. PwC said that UK households spent 1.3% of disposable income. Looking at the data by income quintile, wireless service was more affordable in the UK across all income quintiles; compared to Australia, wireless was more affordable across every income quintile except the lowest.In my year-end wrap-up, I wrote that there are indeed some Canadians unable to find an affordable device or service plan that they may need to participate in today's economy. We know these technologies can help find a job, maintain health, be in touch with families and friends. In late October, we learned that nearly 1 in 5 Canadians in the lowest income quartile still doesn't have broadband connection at home.But, we also know that in many cases, it isn't just an issue of affordability; the experience learned from targeted programs that deliver low-cost connected computers have helped us to understand that there are a number of factors – not just lower prices – that inhibit adoption of communications technologies among certain demographics.As I have written in the past, most government programs continue to target increasing “supply”, extending the geographic reach of services.We need to focus on strategies to drive “demand”: increasing adoption rates among groups that could subscribe, but have not. That is a problem across all geographies, and perhaps more pronounced in urban markets. That should start with developing a greater understanding of those individuals and households on the wrong side of the digital divide.Mark Goldberg is a telecommunications consultant with 40 years of international experience in strategic planning, managing, designing and implementing competitive telecommunications networks. In naming him as one of Canada's top 10 technology bloggers, itWorld Canada wrote: “No one does a better job of exploring, interpreting or criticizing telecommunications policy in Canada. Period.”