MPs grill telecoms CEOs on wireless pricing in committee

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The CEOs of Canada’s three largest telecommunications companies emphasized that phone and Internet prices are falling during an appearance before parliamentarians on Monday, noting that increased data usage and high spectrum costs may be some of the reasons why Canadians feel otherwise.

The three chief executives – Tony Staffieri of Rogers Communications Inc., Mirko Bibic of BCE Inc. and Darren Entwistle of Telus Corp. – appeared virtually at the House of Commons industry committee meeting.

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Committee members voted unanimously last month to call the trio to testify after a previous invitation to CEOs resulted in other corporate representatives appearing in their place.

The committee is studying the accessibility and affordability of wireless and broadband services, an issue that came to the forefront in January when Rogers confirmed it was raising prices by an average of $5 for some wireless customers without a contract.

Staffieri was pressed on the matter on Monday, with Liberal MP Francesco Sorbara suggesting the move was “tone deaf.”

“Wouldn’t you admit it wasn’t the right time?” she asked.

Staffieri responded that the price increase only affected customers with legacy plans.

“It was important to us to make sure these customers had options,” he said.

“With two clicks, they could access a plan that was on the market and offer them the best value for their circumstances.”

Conservative MP Ryan Williams questioned Bibic and Entwistle about whether Bell and Telus would increase their prices in response to Rogers’ move.

Bibic did not say whether Bell plans to do the same, insisting the company’s focus is on cutting costs, while Entwistle said he remained confident Canadians would see price drops but was “not going to talk about fixing prices.” prices on a forum with my two competitors sitting in the same place. here.”

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Some committee members have said they are concerned about cell phone and Internet prices in Canada, arguing that Canadians pay too much for those services.

But the CEOs cited recent data from Statistics Canada showing wireless prices have fallen 16 per cent in the last year and 47 per cent in the last five years.

“If you just compare across Canada, from 2019 to 2024, in some cases we’re offering 10 times more data for $40 less a month,” Bibic said.

“You can see the massive drop.”

Entwistle said the “massive increase in data consumption” partly explains why some Canadians may have the perception that the prices of their telecommunications services have increased. He said Canadians are “among the world’s biggest data consumers,” which is why major companies are offering them larger plans than before.

“If you mathematically cut the cost in half, but the user uses twice as much data as before, historically the cost will seem the same,” he said.

Entwistle added that the “missing” element of the conversation concerns the cost of the physical cell phone itself, which he says can account for nearly half of a total mobile bill.

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“That’s an area where we don’t control the economy,” he said.

“At the end of the day, that economics is determined by the device manufacturers.”

The three CEOs also told the committee that the cost they pay in Canada for wireless spectrum — the electromagnetic frequencies that enable smartphone communications — are among the highest in the world and make them more expensive to operate.

Last November, Canadian wireless companies collectively spent about $2.1 billion on slices of 5G bandwidth in the federal government’s most recent spectrum auction. At the time, experts said the cost of spectrum incurred by operators could lead to higher mobile prices as companies recoup their investments.

Entwistle said that in 2021, spectrum fees accounted for $100 in every Canadian’s annual wireless bill.

“That fee reflects the fact that Canadian wireless operators have historically paid the highest prices for spectrum through successive spectrum auctions in the world,” he said.

“That’s an important part of our cost base and I would say it’s inconsistent with a policy of trying to improve affordability.”

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Bibic added that if government-imposed spectrum prices in Canada followed the global average, “every Canadian’s wireless bill would be five dollars less per month.”

But Conservative MP Rick Perkins suggested the blame also lies with the companies themselves. He said Rogers’ quarterly earnings reports frequently “boast that average revenue per user increases every year.”

“That’s why Canadians feel like they’re paying more, because they’re being charged more,” he said during an exchange with Staffieri.

“Average revenue per user is not equal to price,” Staffieri responded, noting that it is “an accounting metric… and includes services that the customer can choose to add.”

“And theirs has risen from $50.75 in 2020 to almost $60 now, in just four years,” Perkins said.

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