The Government expects MNOs to reduce prices by 25% in two years on their mid-range plans.
Background: The prices for mobile services has been a lively issue for policymakers in Canada for some time. The Liberal Party led by the current Prime Minister Justin Trudeau obtained re-election in October 2019 with a pledge to lower wireless tariffs by 25%, claiming this would save almost CAD1,000 a year (USD745.9) for an average family of four.
The Government takes action: On 5 March 2020, the country’s Minister of Innovation, Science & Economic Development announced the release of the 2019 Price Comparison Study, which showed that Canada has the highest or second-highest prices across all baskets of services considered, taking into account Purchase Power Parity (PPP). Prices in Canada are therefore higher than other G7 countries and Australia. The study also shows that prices in France, Italy, and the UK are noticeably lower than most other countries. To address this, the Government will publish quarterly reports on mobile pricing, with a view to make sure the three largest national carriers reduce them by 25%. In particular, MNOs are expected to do so in the next two years for plans that offer between 2GB and 6GB of data per month. Should that not happen, the Government says it will “take action with other regulatory tools”.
Mixed reactions from the main operators: MNOs are understandably protective of their revenues, but they are also recognising that the Government is determined to fulfil its policy objective. For example, Telus recently launched its ‘True North Affordability’ plan, with explicit reference to the Government’s pledge, stating that its annual cost of CAD2880 (USD2,148) exceeds the government target of CAD2929 (USD2,184.7) per year for a family of four. On the other hand, the same operator warned it could cut CAD1bn of investment (USD240m) and 5,000 jobs over the next five years, should the regulator CRTC decide to regulate access for MVNOs in an effort to spur competition.
