David Crow’s Twitter stream alerted me to this Canadian Wireless Telecommunications Association’s (CWTA) micro-site focused on the upcoming 2008 Advanced Wireless Services spectrum auction in Canada. They clearly aren’t happy with the way the auction is being run and they set out to dispel some myths about wireless communications in Canada. Unfortunately their "facts" play a bit fast and loose with the actual truth. Let’s take a look at what they have to say.
Myth #1 – Canada’s wireless industry is not competitive.
Fact – There are more than two dozen (24) wireless service providers operating in Canada today, more than at any other time.
Truth – While there may be more than two dozen providers – and I’d love to see that list because they sure aren’t available where I live – the three national service providers (Bell Canada Enterprises, Rogers and TELUS) continue to dominate the wireless market, with 94% of subscribers and 95% of the revenues according to CRTC reports.
Myth #2 – Canadians feel there is not enough competition in the wireless industry.
Fact – In a 2007 survey by the Strategic Counsel, 82 per cent of people said there are “enough” or “more than enough” choices in wireless service providers in Canada.
Truth – I don’t have the report, but I do have this Rogers press release.According to that, "the survey also indicated that 82% of wireless users were satisfied or very satisfied with wireless phone coverage. Canadians also were satisfied (61%) with the features and technologies available with their wireless phones. Overall, a majority of those surveyed (59%) described good or very good value for money spent on their cell phones. Eighty one percent (81%) said that it was important that Canadian companies provide wireless service to Canadians". Not a thing about enough choices. And as Michael Geist notes, JD Power recently released a survey suggesting that Canadians are increasingly unhappy with their wireless service.
Myth #3 – Canadians pay too much for wireless service relative to other countries.
Fact – At an average of 12 cents per minute, Canada has the second lowest rates for use of wireless technology among the G7 nations.
Truth – As a US resident I paid about half of what I now pay in Canada for more services than I currently have. I also did not have to pay a monthly System Access Fee. But don’t take my word for it. The OECD Communications Outlook 2007 compared wireless prices in 30 countries. They found that the service package most comparable to what average Canadians use was more expensive in Canada than in eight other countries like the U.K., Sweden and Denmark. For other packages, Canada ranked 12th and 22nd. And Jack Kapica compares data pricing in the US and Canada, finding that Canadians would have to pay $400 for the iPhone, and to use all the iPhone features, about $300 a month in voice and data fees (the iPhone is a heavy user of mobile data transfer). By comparison, AT&T, the sole company offering the iPhone in the United States, allows a plan for $100 that includes 1,350 minutes of voice calls, unlimited data, video voice mail, 200 text messages and unlimited use nights and weekends. Just over half the Canadian population had cellphone service in 2005 — the U.S. and Europe hit that level years earlier. The Canadian sector, however, is among the most profitable anywhere. On the key benchmark of average revenue per minute, Canadian carriers make 11 cents (U.S.), according to Merrill Lynch. In the U.S., it’s 6 cents.
Myth #4 – Many Canadians do not have wireless coverage.
Fact – Today, 98 per cent of Canadians have wireless coverage.
Truth – Coverage is pretty good, though there are still pockets of poor coverage. A drive to St. Jacobs, 10 minutes from my house in Waterloo, will leave me with spotty coverage.
Myth #5 – Canada does not currently have any third generation (3G) wireless networks.
Fact – Today, 3G networks allow Canadians to use mobile phones and other wireless devices to watch live TV, download movies and music, surf the Internet, play video games, send instant messages, share photos and connect to mobile computers.
Truth – That one is completely true.
Myth #6 – Canada lags other countries in the adoption of wireless technology.
Fact – There are more than a million new wireless subscribers in Canada each year. Industry analysts forecast that wireless phone subscriptions will surpass land line subscriptions by the end of 2007.
Truth – A million new wireless subscribers has nothing to do with the adoption of wireless technology. It is the use of new technology that Canada is slow to adopt. For example, we have few data applications because of the prohibitively high wireless data rates.
Myth #7 – Canada’s wireless industry is not a world leader when it comes to innovation.
Fact – Canada has achieved a number of breakthroughs in the global wireless industry, including creating the BlackBerry® mobile device and facilitating the first text message between customers of different networks.
Truth – Canada’s wireless providers did not create the BlackBerry, though the first internetwork text message is a bigger deal. However technology such as mobile handsets lags behind the US by several months, and behind the Pacific Rim by years. When I moved to Canada my wireless provider told me that my brand new Nokia phone – not yet available in Canada – would not work on their network because it as inferior. It took a call from Nokia to straighten them out and then it worked just fine.
Myth #8 – Canada’s wireless industry does not contribute significantly to the economy.
Fact – Canada’s wireless industry spends hundreds of millions of dollars a year on infrastructure, equipment, research and development, and employs over 25,000 Canadians in highly skilled jobs. In addition to the $1.5 billion in license fees that the federal government collected from the last spectrum auction in 2001, the wireless industry pays Ottawa more than $150 million a year in wireless licensing fees.
Truth – Yes the government collected $1.5 billion in licensing fees (substantially less than that collected in the US) but wireless licensing fees were eliminated in April 1987 in favor of selling spectrum licenses. Yet the wireless providers continue to charge a monthly System Access Fee of $7-$9 dollars. This fee has been described incorrectly as a tax or government fee until the providers were told to stop doing so. That System Access Fee alone generates revenue of $1.3-$1.5 billion annually, dwarfing that one time spectrum purchase.
I could go on and address all 15 of their "facts", but I think I’ve made my point.
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