Deputies consider request for a study on price increases in cell phone plans

Telecommunications industry observers say it’s clear the costs are too high.

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MPs met on Thursday to consider a request for a study into price increases for mobile phone packages as telecoms industry watchers say it is clear costs are too high despite signs that Prices have dropped in recent years.

Members of the Standing Committee on Industry and Technology discussed the issue after Rogers Communications Inc. confirmed last week that prices are increasing by an average of $5 for wireless customers without a contract. The measure will take effect on invoices received after January 17.

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The committee meeting was adjourned without reaching a decision on whether to study the matter.

Rogers declined to comment on the committee meeting, but pointed to an earlier statement pointing to some recent pricing announcements. That included Rogers halving the price per gigabyte of data on its most popular 5G plan and reducing its 5G entry price by 35 percent when bundled with residential services.

Some Bell customers have also posted photos on social media of notices informing them that their wireless bills will increase; however, BCE Inc. has not responded to requests for comment.

Telus Corp. also has not responded to questions about whether it plans to raise its rates. On Thursday, Cogeco Inc. Chief Financial Officer Patrice Ouimet confirmed during his company’s latest quarterly earnings conference call that its Canadian customers experienced an unspecified price increase in October.

Thursday’s meeting in Parliament was requested by industry committee members Rick Perkins, Ryan Williams, Brad Vis and Bernard Genereux of the Conservatives and bloc MP Sebastien Lemire.

They wrote in a Jan. 8 letter that the impending price increase by Rogers “appears to be the first material impact of Canada’s cell phone market becoming less competitive” following approval by the Minister of Industry, Francois-Philippe Champagne, of the Rogers-Shaw merger last year.

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At the time, Rogers CEO Tony Staffieri promised to reduce costs for customers, saying in an interview that “competition is increasing, especially in the west, and prices are going to go down.”

The Canadian Telecommunications Association has touted data compiled from Statistics Canada inflation reports showing that cell phone costs have fallen more than 47 per cent over the past five years, in contrast to an overall rise in inflation from 19 percent during the same period.

“While we question the need for a study, we know that a review of wireless plan prices will show what Statistics Canada has already concluded: wireless services have never been cheaper,” said association spokesperson Eric Smith.

“As prices have fallen, the industry has been investing billions to increase capacity, coverage and quality of service, as evidenced by a 90 percent increase in average mobile download speeds over the last five years”.

But consumer advocate Mohammed Halabi said some big companies are trying to sell bigger plans with more data and bundling options. That means consumers can see their telecommunications bills grow, even though they are getting more bang for their buck.

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He said it’s difficult to find deals that adequately represent the average usage of most customers.

“I still think the prices are too high,” said Halabi, director of MyBillsAreHigh.com, a company that helps businesses and private customers save on their telecommunications costs.

“Everyone is trying to push these broader plans, more data. Yes, the cost per gigabyte has gone down when you look at it because they offer you 100 or 50 gigabytes for $75 versus 30 for $75, but we want to see cheaper prices that adequately qualify customers.”

In a statement, Champagne said Canadian consumers continue to pay too much despite progress in lowering prices. She urged carriers to “seriously consider customers over profits right now.”

“While prices for some wireless plans have decreased by more than 22 percent over the past year, the planned price increases for certain monthly plans that have been recently announced run counter to the spirit we have set for ourselves, at a time in which Canadians are struggling to make ends meet,” Champagne said.

“I am willing to use any other tool at my disposal to fight for Canadian consumers.”

When asked to clarify what specific measures the minister might take and whether he supported a possible study on telecoms prices, a spokeswoman for his office responded: “We will take appropriate measures, if necessary and if the time comes.”

“As a regulator, the minister has many options and tools at his disposal,” said Audrey Champoux.

“We will leave it to the independent committee to debate and make a decision on the best way forward.”

With files from Nojoud Al Mallees.

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