Telecom services still too expensive, industry minister says

Canadians are still paying too much for telecom services, the industry minister said Thursday, one day after Rogers Communications said it was raising the cost of some of its wireless phone plans.

Rogers said Wednesday it would hike the cost of some of its wireless plans for non-contract customers. Bell is also reportedly increasing some of its existing wireless phone plan prices in February, according to a report by MobileSyrup. 

“Let’s be clear, while some progress has been made to lower prices, Canadians still pay too much and see too little competition,” Industry Minister François-Philippe Champagne said in a statement to CBC News.

“That is why, last year, I issued a policy direction to the CRTC to make sure that competition, affordability and consumer rights would be at the core of CRTC decisions.”

Nearly two dozen “enforceable” conditions were attached to Rogers’s merger with Shaw Communications, including reducing costs for customers, when Champagne announced the deal’s approval in 2023. 

“While prices for some wireless plans have declined by more than 22 per cent over the past year, the planned price increases to certain month-to-month plans that have recently been announced go against the direction we set at a time when Canadians are struggling to make ends meet,” Champagne said Thursday.

“I strongly urge companies and carriers to seriously consider customers over profits at this time.”

The long-brewing deal, first announced in March 2021, was subject to a number of regulatory hurdles as opponents expressed concerns about decreased competition.

At the time, Rogers CEO Tony Staffieri pledged in an interview that prices would go down for customers. 

Bell has not responded to a request for comment.

‘Part of our heritage’

The hikes can be viewed as a sort of “disciplinary intervention,” said Vass Bednar, executive director of the Master of Public Policy program at McMaster University in Hamilton.

She told CBC News the telecom companies may want to push customers “that have chosen to have more freedom with their contracts” to lock into a plan in order to avoid the price increase.

But she points out that there aren’t many alternatives for customers who are fed up with wireless providers raising their prices.

“It’s a part of our heritage now, right,” she said. “Partially because of how we structured how telecommunications companies can compete.”

WATCH | Few options for customers fed up with wireless plan price hikes:

Customers mad at Rogers price hikes stuck with limited choice, says expert

Customers unhappy about Rogers raising the cost of some of its plans don’t have many other options thanks to the highly concentrated wireless sector, says Vass Bednar, executive director of the Master of Public Policy program at McMaster University.

The three major wireless providers — Rogers, Bell and Telus — own and operate the physical infrastructure and rent it out to smaller companies that may offer cheaper options.

Bednar says that’s why you may see them raising prices as well. 

Canadians have some of the highest telecom bills in the world, according to industry research.

David Soberman, a professor of marketing at the University of Toronto’s Rotman School of Management, says regulations against foreign ownership in the telecom market also contribute to those high prices.

“The countries where they have much more competitive mobile phone rates are countries without those impediments,” he said.

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