Tuesday, December 13, 2005

Wireless in Canada Lags the U.S. - Really

Today's Globe & Mail has a nice article by telecom reporter Catherine McLean about a new study from the C.D. Howe Institute (a policy and economics think tank) about how cell phone use in Canada lags other industrialized countries. You can review the full report here - it's read-only - you can't save it.

I've commented often about the uninspiring state of affairs in Canada's communications market - and not just IP - satellite radio and wireless too. The market here is just too small, too regulated, and it lacks the intense competition we see in the U.S. There's lots of great innovation here, and our carriers are world-class - but the market just seems so dysfunctional at times, and there's not a whole lot being done on the marketing side to help create awareness and demand among consumers.

Well, the wireless market isn't any different, and anyone who knows me has heard my running commentary about how Americans are much more married to their cell phones than Canadians. Any time I go to the US, it's one of the first things that strikes me cold. EVERYONE seems to be on their cell phones. The second the plane lands - boom - on go all the phones. Canadians love their cell phones too, but I'm sorry, it's just not like that here. It's getting that way, but it's not like the US, and certainly nothing like Israel or Europe, especially places like Italy or Sweden.

My social commentary may seem trivial, but it's a bigger deal to the C.D. Howe's of the world. The article talks about how we lag other G7 countries, and looks at some of the reasons. There's a pretty good reason why Americans live on their cell phones - even though they don't always have great reception - it's really cheap, especially when compared to landline. Canadian wireless operators don't give away minutes like American carriers do, and our landline service quality is very high and very affordable.

As such, there isn't that much wireless substitution happening here, and making cell phone calls to the U.S. is still pretty expensive - and very expensive if you're calling inside the U.S. Not to mention the lack of wireless nubmer portability here - which I've commented on previously.

A closing sidebar about this article - the online version you've got here differs in two ways from the the print edition which I read at breakfast this morning. The good news is that it includes a nice thread of reader comments, which adds great anecdotal flavor to Catherine's story. What's missing is a table of statistics taken from the ITU showing teledensity levels for industrialized countries. This is 2004 data, but it still tells the story. In Canada, there are 41.68 cellular subscribers per 100 inhabitants - so, a 42% penetration rate. The U.S. level is 54% - not hugely higher, but well ahead. Italy really kicks ass with 102% penetration - I don't know about you, but I can only talk on one phone at a time! The other European countries are all in the 70% or 80% strata, so our degree of solace is all relative.

Canada looks pretty pathetic compared to Europe, and we're dead last amongst our economic brethren. This story just validates my thinking on our wireless market, and now I have some numbers to back it up. Thank you C.D. Howe. Let's put a positive spin on things folks - would love to hear your bright ideas about how we can improve our standing in wireless, and maybe then we can make some noise with the CWTA, the Canadian Wireless Telecommunications Association.


ipcom said...

Posted by: PhoneBoy

"Cheap" landline service is the norm down in the states too, at least from my point of view. In many cases, the cost difference between a landline and cell phone is a wash, though when you start factoring in things like multiple-to-mobile minutes, a cell phone can be a lot cheaper.

ipcom said...

Posted by: Alan Gahtan

At least with respect to data ... there was a time ... when Fido's C$50 per month unlimited GPRS service was cheaper than any US competitor. But, it stayed at that price while US mobile companies continued to drop rates or upgrade data services. And then came the acquisition by Rogers....

Also, why US wireless voice carriers provide packages with huge buckets of minutes, I have not noticed them coming out with unlimited incoming packages yet.

ipcom said...

Posted by: Frank Bulk

How does this lack of cellular penetration relate to the fact that Canadians have a higher penetration in broadband? Does this have something to do with mobility?