Statistics can be persuasive. They appear to be so factual, but also allow for distraction through irrelevant comparisons. Comparing Canadian wireless prices to overseas rates is an example of such comparisons.
Outside of North America, wireless services are paid for using a system known as Calling Party Pays (CPP). When you travel overseas, it is quite common to be able to get a phone with unlimited incoming calls for free from your hotel; the hotel and their supplier carrier make money everytime you receive a call. Incoming calls are free but you pay for outgoing calls, often a lot, especially if calling to another carrier.
Why is European data usage so much higher? A large component is text messaging to people in order to avoid placing expensive voice calls. You text message your colleague or parent at the office and have them call you back – call it the modern way of taking home pens and pads of paper from the office. Free monthly service, high per minute outbound calling, high costs to call to a mobile from fixed lines or other carriers. Is that the kind of competitive wireless environment we want to emulate?
Canadian wireless minutes of use are higher than most other countries. Is this consistent with a conclusion that prices are inhibiting use of wireless? Canadian rates per minute have fallen substantially and can be expected to continue along that trajectory. Calling plans are continuing to get more creative. As a consumer, I would like rates to fall even more – I like free, to tell the truth.
But government intervention to artificially stimulate an additional competitor? I liked the opening of Rob Carrick’s column in yesterday’s Globe and Mail:
The Prime Minister said the other day that paying fees to withdraw money from a bank machine annoys him. Me, too. I’m also annoyed by the inability of the Toronto Maple Leafs to win the Stanley Cup, by morning rush-hour traffic and the long lines at every Tim Hortons in the country. Do I want the government to get involved and solve these problems?
The same applies to wireless service competition. Let the marketplace work.
Although, I’d agree with government action to help the Leafs. Playoffs are around the corner.
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