Canada’s Mobile Data Prices vs. the World in One Chart
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The major reason for the prices is the federally enforced monopoly that Canadian telecom companies have in Canada. It's effectively illegal for foreign telecom companies to do business in Canada, which results in a market where prices are high, and rather similar across the board. In other-words: we're seeing classic monopoly economics happen thanks to regulation specifically designed to enable monopolies.
The CRTC is frequently criticized as being an unelected and unaccountable agency. What's making things more difficult for Canadians too is the current administration's approach to the CRTC, which has been to vastly expand their power as an agency. That, and frequent back-tracking on regulatory decisions which are unpopular with the telecom companies, but popular with the Canadian people.
I'm however not so confident that allowing foreign telecoms would fix everything. Likely they'd just add a fourth partner to the price fixing, as happens in Québec with Videotron.
Not even that, but there's a lower limit of how cheap those providers can be since, in the majority of cases, they're actually just using the Big Three's telecom infrastructure anyway. While I have no proof of this, I strongly suspect that the Big Three throttle connections over these too, given how unreliable the third-party vendor's connections are.
In addition though (not instead), I wonder how much our unique geography plays a part.
I don't see an external competitor building out infrastructure over our entire territory. So if they build infra in say Toronto or Montreal or Vancouver, is it actually easy/fair for them to compete with a national carrier that builds out infra across the entire country and spreads those costs out? Or if external competitor is more like TekSavvy, and just plops as a reseller on top of existing infra, is that a real solution / does it move the needle forward / remove the dependency?
I find most things are complex in their implementation, so I'm not sure how to make this one better :-/
I mean, politically, not economically. The vast majority of Canada lives in a major metro area…namely the hyper-sprawl that is the GTA. You’d serve most of your possible user base by plopping towers around Toronto, Ottawa, Montreal, Vancouver, Calgary, Edmonton.
But I suspect you would rapidly hear screaming about inequality of access for rural areas.
(https://en.wikipedia.org/wiki/List_of_census_metropolitan_ar...)
As you can see, Russia has much more coverage than Canada, at a literal tenth of the cost.
Starting with the obvious point that none of what I'm about to point out excuses Canada's backwardness on telecom -
Poor countries almost always do things at cheaper prices. Canada isn't going to be paying people $1 per hour for their labor. Russia's monthly mininum wage is $169, it's an exceptionally poor country for the bottom 2/3. You need to find what the income adjusted gap actually is, not just go off of the surface difference (which always results in misleading eye-popping differences).
Roads in Ukraine are also built and maintained at lower costs than they are in Switzerland, which tells you very little about whether Switzerland's cost for building and maintaining roads is outrageous or appropriate for their incomes / economic development.
Russia has approximately 1/5 to 1/4 the income level of Canada. That means when they build telecom services, they can't reasonably charge $60 per month for plans and expect to get many customers, and when they build infrastructure they're able to build it at a cheaper cost than Canada can. Cheap labor is one of the few advantages poor nations often possess over affluent nations.
A ten fold cost difference between Canada and Russia, is more like 2x or 3x when you make the proper income adjustments.
This means that the biggest cost is, by far, CAPEX, not labour. If you don't believe me, we can look at the financial statements for Bell : https://www.bce.ca/investors/AR-2020/2020-bce-annual-report.... [PDF Warning]. Labour is only 33%, and a lot of that labour is in wired connection installations which require disproportionately more labour than wireless installations. I don't see why these costs would be any lower in Russia.
Indeed, if you try to get data for Wireless only, you'll find that the Wireless section has an EBITDA of 3.7 billion, with a revenue of 8.7 billion. That's an insane EBITDA margin of 42%. and that's in a pandemic year. Now the issue with these figures is that this takes into account contract phones, as revenue. In reality the profit margin of just providing the wireless network is simply through the roof.
So even if you were to remove the 20% or so that goes to labour in the wireless segment completely, Canadian telecoms are still 5x+ more expensive than they should be.
In reality even our hallowed resource industries have never even been domestically managed or owned. Survey the companies in the towers in downtown Calgary, and they're mostly American operations.
We're guests on our "own" land.
The amount of pressure on the CRTC to avoid setting lower rates was significant. Major wholesale based ISPs stood to get hundreds of millions of dollars in refunds since the interim rates would have been adjusted to the lower rates retroactively. This made the incumbents highly motivated to fight the issue.
The sad part is that these GAS wholesale rates are basically irrelevant to Bell at this point. Bell only has to provide wholesale access to DSL under the GAS tariffs in question, which basically limits wholesale ISPs to DSL speeds less than 50 Mbps at the current rate of $23.79/month per access. Bell has already made significant deployment of FTTH/FTTP, but those services are only available under the disaggregated tariffs at interim rates of $121.79/month per access. Bell sells their own FTTH services at retail rates of $90/month for 1.5 Gbps, less for lower speeds.
I've participated in a few CRTC proceedings, and having seen what just happened, I have no faith that the Ian Scott will make any pro-consumer decisions. One of the excuses used to justify the backpeddling is that they incorrectly calculated the cost of umbilical fibres, by using filings made by Bell whinging that they have to run entirely new fibre all the way to the remotes. Any reasonable carrier in the developed world would make use of CWDM or DWDM hardware to add capacity in full umbilical fibres feeding DSL remotes. If you have a GPON segment that is out of umbilical fibres, you can deploy 10G EPON or XGSPON instead and use a 1x64 splitter instead of a 1x32 splitter while having oodles of spare capacity.
There are 2 proceedings of interest to me that are active at the moment. One is to try to figure what to do with the disaggregated regime which has basically seen 0 deployment as the cost per CO is in the $50k-250k on top of the $121.79 per premises monthly access. For reference GAS (aka aggregated wholesale access) has a total setup cost in the ballpark of $10,000 to access all of Bell's network across Ontario and Quebec. The other relates to access to poles owned by the incumbents. Both of these are critical to competitive ISPs (like the facilities based FTTH provider I founded) and could help make things for competitors easier. But we're only 8 months into a proceeding that's likely to last 2+ years.
As a facilities based provider I've had to eat losses on 3 large projects where the incumbent came in an decided to roll out service across 15 kilometer markets they had ignored for decades prior to my company showing up. They use tricks like delaying and denying permits for reasons as simple as "the pole owner isn't right on the CAD drawing" adding 30 day delays. The CRTC should be the one fixing these issues, but it's almost always too little too late.
I could go on. My telecom in Canada rant generally takes more than 2 hours to get through...
Canada is a massive, spread-out country, and providing coverage is uniquely difficult.
You want the real reason for this?
The second, the nanosecond any politician let any foreign competition into the complacent, cushy Canadian market, Rogers and Bell would unleash a propaganda campaign about the theft of good Canadian jobs. (Just like the dairy industry does.)
That's such a worn out trope that doesn't match the reality that most of the population lives on the southern border near a handful of cities. Serving the US population is demonstrably harder and yet manages to be cheaper despite our own widespread price fixing.
All Canada would probably have to do is invite T-Mobile to come in and wreck the telecom cartel (including making sure T-Mobile had proper access to spectrum to compete). The cartel will, of course, obviously fight any attempts to change the status quo.
Canadians are being fleeced.
I think it boils down to good legislation and luck on how our 3 mobile operators compete.
In reality most dairy farms are large industrial operations, though.
This is great for the dairy industry, they love to advertise that most farms are small, family-owned operations, which is technically true, while selling you factory farm milk.
(If it's not intuitive, imagine a world with 10 farms with 50 cows each, and one farm with 3000 cows.
I suspect that herd size looks more like a power law distribution than a normal distribution, but a quick google search didn't turn up good data.)
My understanding is it's very hard to get quota.
If the government really cared about protecting consumers, they would not care about the country of origin. They would have import controls that ensure imported foreign milk follows the Canadian standards you mentioned. Instead, they simply slap an incredibly high average duty of 218.5% on any dairy product coming from abroad, no matter its characteristics, effectively blocking any import of dairy.
There is high-quality milk made in the U.S. too. But Canada prefers to protect Canadian oligopolies and keep competitors out. And this way, consumers keep paying higher prices for the same product. Why not let consumers decide what they want to purchase?
So sadly for us to keep this standard we probably have to keep a similar system to the one we have right now.
Fine, then don’t allow importation of milk with those additives.
What exactly is the market reason for keeping out, say, organic US dairy?
(Oh, right, Quebec lobbyists.)
Edit: I just checked and it's actually 15GB but that's a "temporary" add-on apparently.
EDIT : I'm wrong, it looks at revenue.
I'm fairly certain the methodology is the same for all countries.
https://news.ycombinator.com/item?id=27763164
125USD per GB. Compared to 14EUR per GB on this chart.
But I think you were on the right track, possibly most people have low-end plans so total revenue skews towards low end plans? But you can definitely get data much cheaper than 14EUR per GB.
You can get data at theoretically 0$/GB if you get an ungodly expensive truly unlimited plan, so the marginal cost isn't accurate, we have to be at or near the average, and most plans are going to be lower end.
There really is no excuse for this when a country with similar metrics like Australia is able to have way more affordable service.