MPs Challenge Telecom Execs’ Defence of Phone Plan Pricing

A man speaks on a mobile phone outside Rogers Communications Inc.'s annual general meeting of shareholders in Toronto on April 22, 2014. Darren Calabrese/The Canadian Press

The top executives of Canada’s three largest telecom companies argued before a parliamentary committee that they have been lowering mobile prices to accommodate customer needs, despite criticism that Canadians pay more due to a lack of telecom competition.

The chief executive officers of Bell, Rogers, and Telus defended industry pricing while testifying before the Commons industry and technology committee on March 18. MPs on the committee had called the CEOs to address concerns about high mobile plan prices in Canada.

All three representatives argued that a competitive Canadian industry has driven mobile prices down despite the rising cost of living.

“Canadians pay much lower prices for wireless internet today than they did just a short time ago,” Bell CEO Mirko Bibic said in his testimony before the committee, which was first covered by Blacklock’s Reporter.

“As prices have fallen, Bell has significantly increased how much data customers receive each month. For an average Canadian using between five and seven gigabytes of wireless data per month, prices have fallen nearly 30 percent. That’s $13 per month.”

Rogers Communications CEO Tony Staffieri told committee members that “customers are getting more for less both in absolute terms and on a per-gig basis.”

“There are few industries today where you see record investments and consumers are receiving more, often at a lower cost,“ Mr. Staffieri said.  ”This is the outcome of rigorous competition.”

He pointed to newly released data from Statistics Canada indicating the cost of telecommunications services is trending down compared to last year.

Consumers who signed on to a cellphone plan in February paid 26.5 percent less than they did during the same month a year ago, the March 19 report said.

“The year-over-year decline was driven by lower prices for new plans and increases in data allowances for some cellular service plans,” StatCan said.

A 2023 report from financial services comparison firm HelloSafe rated Canada as the 10th most expensive country for mobile data.

HelloSafe found that Nova Scotia and Quebec were the provinces with the highest prices, while Saskatchewan was the cheapest by a significant margin.

“This result is due to the presence of the operator Sasktel, which allows it to compete with the three historical players of the market — Telus, Rogers and Bell,” HelloSafe said.

The study also found that while Americans paid higher data prices than Canadians, mobile data in Canada was 26 times more expensive than in France and 61 times more expensive than in Italy.

‘Canadians are Telling us Different’

MPs on the committee questioned Rogers CEO Tony Staffieri on the price increase his company implemented on some mobile plans in January. Some plans went up as much as $9 per month.

When Ottawa approved the telecom giant’s takeover of Shaw Communications last year, it was on the condition the company would offer low-cost wireless and internet plans and increase its investment in wireless coverage. Rogers also pledged to lower 5G data prices by 30 percent.

Mr. Staffieri said the plan increases affected “a small percentage of our customer base,” with the average increase coming in at $5 per month.

He said most Canadians are using their cellphones more and using more data, causing their bills to increase.

“I think what you’re seeing is a massive increase in data consumption,” he said. “Canadians are amongst the highest data consumers in the world.”

He also said Rogers price plans in Canada are low compared to the United States.

Conservative MP Ryan Williams challenged that statement. “Canadians are telling us different,” he said, adding that Roger’s Fido plan is only offered on 4G compared to the cheaper plans in the U.S. which run on 5G networks.

“We have other plans on our Chatter brand that’s as low as $19,” Mr. Staffieri replied. “And when you look at our price points relative to having the best networks in the world, certainly the value for money ranks at our near the top, and definitely higher than the U.S.”

Liberal MP Francesco Sorbara also expressed doubt about the Rogers’ CEO’s claims.

“The comments we have heard on the competitive dynamics within the Canadian wireless or telecommunications market here within the room have met with some skepticism, maybe a few chuckles,” said Mr. Sorbara. “I do want to get that on the record.”

Telus CEO Darren Entwistle described Canadian data pricing as competitive but said the government’s division of the market drives up costs. He used as an example a 2021 spectrum auction for 5G services that netted Ottawa nearly $9 billion.

He said spectrum costs are handed down to the customer, likely accounting for $100 annually on their mobile bills.

The CEOs, who all testified via videoconference, were criticized by Conservative MP Rick Perkins for not making the effort to appear in person.

“I would like to express my disappointment that you are not here in person,” he said. “I am sure you could have got on your private jets to get here without too much trouble.”