Why is the Canadian wireless telecom industry the way it is today?

June 17, 2007 9:14 AM

Why is the Canadian wireless telecommunications industry the way it is?

I'm specifically looking for insight into the history of wireless telecommunications in Canada and how that brought us to the current state of the industry. Basically, how did Canada get the reputation of being the "telecom third world"? Why are wireless data plans so expensive here compared to the US? Is it the fault of the CRTC, the carriers, a combination of the two or something more complicated?

posted by saraswati to technology (7 comments total)

A geography larger than the USA with only 1/10th the population might have something to do with it. When compared to Europeans the ratios are even more disproportionate. Perhaps a better comparison would be with Russia.
posted by furtive at 9:23 AM on June 17, 2007

Australia would be a more apt comparison: similar standards of living, and a low population density but with population centered in cities, with similar numbers to boot. Wireless data plans are pretty much the same price is Australia as they are in the US, and nowhere near as expensive as in Canada.

Considering how urbanized Canada is, I don't see how population density is a sufficient explanation. Until it was purchased by Rogers, Fido was a discount carrier that only had networks in the major cities. There was no service outside greater Vancouver, Toronto and Montreal. They did grow with time, but because they were only focusing on places where there was a solid user base, they were far and away Canada's cheapest carrier.
posted by [expletive deleted] at 9:59 AM on June 17, 2007

Of course, I'm not saying that the big three are expensive because they have bigger networks. They do have bigger networks, but to say that they are expensive compared to the US because of our population density as a whole is absurd. I would be surprised if more than 1/20 of the total area of Canada was covered in wireless networks.
posted by [expletive deleted] at 10:06 AM on June 17, 2007

I think Industry Canada sets policy for this area, and CRTC just enforces it.
This is handy:
Telecommunications Policy Review Panel.
There has been delay in opening up spectrum to carry new service, which is Industry Canada's bag, not CRTCs. People say that compared to Europe, our cheap, reliable and widely used landlines made opening up wireless less attractive, and so we are behind. That doesn't explain the difference between the US and Canada though.
posted by girlpublisher at 11:07 AM on June 17, 2007

I have heard girlpublisher's account (cheap landlines) bandied about as an explanation for slow wireless adoption in Canada. Compare to places like the UK where, I am told, local landline calls a biller per-minute just like long distance or wireless calls are here in North America.

Low population density is also logical. The high cost of wireless infrastructure investment over large geographical areas has to be financed by a relatively small subscriber base. With Fido out of the running as an 'indie' carrier, the remaining carriers are focused on covering semi-rural areas as well as urban, and so focus less on rolling out next-gen technologies in the urban areas that could support such an investment.

Slow adoption of mobile phones in Canada is also seen as somewhat paradoxical because it cannot be attributed to across-the-board technophobia or overall slow tech adoption. Look at how incredibly fast Interac debit payment took off here compared to other parts of the world. I have heard this explained with reference to the relatively small number of banks and their concerted push to close branches and move to ATMs in the 1990s. Places with a multitude of smaller, local banks (like the US) rather than a handful of national banks have adopted debit payment much more slowly.
posted by onshi at 1:34 PM on June 17, 2007

Telecom in Canada operates as an oligopoly. The few companies simply don't compete with each other. Thus: high prices for lesser amounts of service.

Telecom in the U.S. operated as a monopoly, then was broken up, and is now just about back to the oligopoly stage. So from a future expectations point of view, it's not that Canadian prices are high for small amounts of service, it's that U.S. prices are low, which is about to be "fixed" by a new pricing scheme introduced by AT&T/Cingular/Verizon/PacBell/SWBell/MCI/Qwest/Sprint/Nextel, which is also known as "the phone company".
posted by jellicle at 6:27 PM on June 17, 2007

A geography larger than the USA with only 1/10th the population might have something to do with it.

Unless Canadian law requires wireless providers to provide service to the vast amounts of hinterland, this shouldn't be true.

Most Canadians live in areas where the population density is just fine -- heck, most Canadians live in the Quebec City-Windsor corridor -- and unless they're required to, the companies could just not provide service to low-density areas that wouldn't be profitable.
posted by ROU_Xenophobe at 7:45 PM on June 17, 2007