Statistics Canada says telecommunications prices continue to fall, reducing inflation

As MPs study the affordability of telecommunications services, Statistics Canada says cell phone and Internet costs continue to decline, which helped reduce the national inflation rate last month.

Consumers who signed up for a cell phone plan in February paid 26.5 percent less than during the same month last year, according to the Consumer Price Index report released Tuesday. This follows a 16.4 percent year-on-year drop in January.

It said the latest year-over-year decline was due to lower prices for new plans and increases in data allowances for some cellular service plans.

StatCan also said that Internet access prices in February fell 13.2 percent year over year and 9.4 percent month over month, highlighting some special offers that became available from providers last month.

The agency’s telecommunications price calculations reflect two main factors: the raw prices of services and the “quality gap,” said telecommunications consultant Mark Goldberg.

The price drops in the national inflation report could indicate that consumers are getting more for their money through new offerings, such as larger data packages, international roaming benefits or voice-to-text voicemail services.

“You either get more for the same price or you pay less for the same thing,” said Goldberg, who likened it to “the opposite of inflationary contraction.”

“If you go to a grocery store and the box of cereal on the shelf is $3.99, but last month it was a 500 gram box and this month it’s a 400 gram box… you would say the prices went up 25 percent. penny. In this case it is quite the opposite.”

The StatCan report showed Canada’s overall annual inflation rate was 2.8 per cent last month, up from 2.9 per cent in January, and the agency cited internet and cellular service rates as one of the drivers of that decline.

February’s data is in line with national trends often touted by the telecommunications industry. From January 2019 to January 2024, the cost of cellular services in Canada decreased by 47 per cent, according to StatCan data highlighted by the Canadian Telecommunications Association.

“While most goods and services have become more expensive, fierce competition in the telecommunications sector has resulted in significant price drops for both cellular and Internet services,” the association spokesperson said. , Nick Kyonka, in an email.

Telecoms pricing has been a hot topic lately and the issue is currently being studied by the House of Commons industry committee.

MPs on the committee sounded the alarm in January when Rogers Communications Inc. confirmed it was raising prices by an average of $5 for some wireless customers without a contract and some Bell Canada customers were also told their wireless bills would increase.

On Monday, the committee heard testimony from the CEOs of Rogers, Bell and Telus Corp., who emphasized that phone and Internet prices are falling. But they acknowledged that some customers don’t feel they are paying less and noted that Canadians’ data usage has increased in recent years.

“I just don’t see plans that cater to low-usage customers,” said Mohammed Halabi, director and founder of MyBillsAreHigh.com, a company that helps customers negotiate with cellphone providers to save money.

While large companies offer plans that allow customers to pay less per gigabyte of data, he said they typically include a “huge amount of data that customers don’t necessarily need.”

“Where are the plans that are more suited to people who only use five gigabytes?” Halabi said.

He added that customers increasingly have opportunities to save on their mobile phone bills by combining them with other services such as TV or home Internet.

“But that pushes you to look for another service that you may not need and then you have to deal with significant discounts that expire, in some cases, after two years.”

Goldberg said it’s important to recognize that someone who has followed the same plan for years wouldn’t notice the effects measured by StatCan. His report only captures changes to customers’ bills, including those who changed providers or renegotiated their existing plan with their provider.

“You shouldn’t be on a two-, three-, or five-year pricing plan,” he said.

“If you’re still on the same plan you had two years ago, you’re not going to get enough data for the same amount of money.”

This report by The Canadian Press was first published March 19, 2024.


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