Canadian cellular prices declining, mainly for talk and text, report finds

Prices for cellphone service in Canada came down in the last year, but only if you don't use your cellphone very much.

That's one of the major takeaways from a new report looking at telecom services and how they stack up with the rest of the world, and compared to what they used to be.

The federal government published the report but the data was compiled by digital consultancy Nordicity Group Ltd, which looked at the state of telecom in six cities: Halifax, Montreal, Toronto, Winnipeg, Regina and Vancouver.

In a chapter on mobile service bundles, the report breaks customers into six groups, based on how much they use their cellphones:

• Level 1: 150 incoming and outgoing minutes per month, with no extra features.
• Level 2: 450 incoming and outgoing minutes per month, plus voice mail and call display, and 300 text messages.
• Level 3: 1,200 incoming and outgoing minutes per month, plus voice mail and call display, 300 text messages and one gigabyte of data per month.
• Level 4: Unlimited talk and text across Canada; at least voice mail and call display plus two GB of data
• Level 5: Unlimited talk and text across Canada, at least voice mail and call display plus five GB of data
• Level 6: A family plan with unlimited talk and text within Canada voice mail and call display, plus 10 GB data usage per month, across three phone lines.

The good news for consumers is that prices fell — often sharply — for the three lowest service levels. The price of the first level decreased by more than a quarter to $30.53 per month. Level 2 got one-sixth cheaper, to $40.95 per month. And level 3 got 5.3 per cent cheaper, to an average bill of $70.70 per month.

• ANALYSIS: Demand for unlimited data plans is growing

But heavy users, for the most part, didn't see their monthly fees come down. Level 4 inched up to $81.61 a month, on average, Level 5 increased by 8.2 per cent to $104.49 a month and the average price of a high-level family plan increased by almost one-seventh to $264.65 a month.

"Prices for low- and mid-use wireless plans are declining, allowing more Canadians to access services at rates they can afford," the government said in a press release. "While progress is being made, the government will continue to watch market dynamics and promote more competition so that all Canadians can have high-quality services at affordable prices."

Prices aren't moving in the same direction across the country, either. While prices fell just about everywhere for the three lowest service levels, the expensive higher-end ones got even more so this year, in almost every city examined.

• Why Canadians struggle with runaway charges

In cities Ottawa describes as having "strong competition," prices are on average 31 per cent lower than the national average. 

One such market is Regina, where SaskTel competes fiercely with three large incumbent companies. Prices declined in Regina in every service level except the last level, for family plans. Data-heavy plans in Regina are 26 per cent cheaper than they are elsewhere in Canada, the report found.

Other city highlights include:

• At five per cent below the national average, Montreal is the least expensive for low-use mobile wireless plans.
• At 18 per cent below the national average, Winnipeg is the least expensive for mid-use mobile wireless plans.

While some segments of the market are more affordable compared to last year, Canada doesn't fare quite as well in international comparisons.

When compared against seven other major countries (the U.K., Germany, Italy, France, Australia, Japan, and the U.S.) Canadian prices were among the top three in every service level — including the most expensive out of anyone, for Levels 3, 4 and 5.

But "low-use mobile wireless plans were cheaper in Canada than in the U.S. for the first time since 2013," the government said in a release.

• Cellphone use is surging — but so are the bills