The Cartel of Expensive Telecom in Canada

Canada telecom

As blogged earlier, it’s no secret that Canada has one of the most expensive mobile / wireless / data services for a country of its economic class, if not the entire world. I attribute this sad fact to what I’ve begun calling The Great Canadian Telecom Cartel.

As a matter of fact, at 40%, Canada has the lowest cellphone penetration in the industrialized world!

The Cartel, to an inexperienced newbie like me, comprises of an unfortunate (very fortunate to the owners) small number of companies – Bell and Rogers, with a wannabe aspirant Telus loitering outside waiting anxiously for memebership into this coveted Family (which it will get.)

Some have tried to rationalize it. But to an average consumer of such vital services in today’s world, it doesn’t make any sense, especially when you’re neighbours to such 1000-pound Gorilla as the United States of America.

Of course, if you just need a phone line, you’d hardly complain. But in this increasingly data-driven, mobile and wireless-laden world, you’d begin to see the giant Cartel’s head rising from many nooks and corners.

Even the mainstream media has sensed that something’s wrong, but have not quiet understood the underlying machinations of the Cartel.

Take Skype, for example. It simply doesn’t have Canadian incoming phone numbers – unlike other ‘developed’ countries. Hohum, you’d say – who cares ? Take iPhone, for example. The reasons for Canada not to have such a runaway success in US, until now, is because Apple must really be frustrated with the Cartel… I’m willing to bet on it (though just a toonie – for I’m a poor dumb newbie.) And read the discussions on some new EVDO services like Amazon Kindle’s Whispernet. I assure you these examples are just the tip of a giant iceberg in Hudson’s Bay.

And that’s not all. Just compare the sadly similiar and carefully controlled phone plans (their code word is ‘competitive’) from the Cartel companies in Canada. Do you see a pattern emerging?

Some people have told me that there are many here – with access to a U.S. address and a U.S. credit card – who simply sign up for U.S. phone plans, which even when in ‘roaming’ mode in Canada are more economical and feature-richer than local plans! I don’t have first hand knowledge, so I can’t really say whether it’s possible, which if it is, would be another shameful feather in the Cartel’s cap.

Is it really because Canada is a small country in terms of population: not worth having more players in the field ? Is it really because the huge land mass of Canada simply isn’t suitable for a telecommunications infrastructure big enough to accommodate more competition?

If that’s the case, then why not nationalize the telecommunications industry, like healthcare and transport ? What’s the reason for keeping the telecommunications ‘business’ a business in the first place if not to benefit a select few companies?

What do you think? Please share other sad examples to highlight why Canada needs more competition in telecommunications and really needs to disband the Cartel.

UPDATE:As being reported, iPhone is finally coming to Canada. And guess who’s bringing it? None other than our Cartel member – Rogers. Here’s the clincher:

Observers had speculated the delayed Canadian launch was due to difficult negotiations over pricing …

But of course, then Apple was made an offer it could not refuse ;) Either Steve Jobs’ signature on the paper or his brains…

UPDATE 2: It appears that iPhone can finally wake Canadians up to the fact that something is really really wrong somewhere

UPDATE 3:For those still in doubt as to how the telecom Cartel is galloping away with murder: Bell and Telus are now going to charge for incoming text messages, and have apparently had the government take notice as well. The only reason, as I see, for Rogers not to be in on it, is probably because Rogers is contemplating a fee for not just the message, but each typed in character.

First Published: April 27th, 2008


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