The Globe and Mail ran a story today that confused cellphone prices with mobile bills.
Prices aren’t the same as bills. I first wrote about that precisely 9 years ago.
The print edition headline was “Statscan figures on falling phone bills clash with other data”. The online headline was “Statscan says cellphone bills are plunging – the truth is more complicated”.
The story lede reads, “As households struggle with the largest bout of inflation in four decades, Statistics Canada says consumers are getting some relief from what is often a source of frustration: cellphone bills.”
The problem? Statistics Canada doesn’t say “cellphone bills are plunging”. The story is about the mobile services component of the consumer price index (CPI), not your cellphone bill. There is an important distinction. Consumers’ total monthly bills are measured in a different Statistics Canada report, the Survey of Household Spending, which is conducted annually (at best).
But, aren’t bills the same as prices? No, they aren’t.
Let’s say you are looking at renting an apartment. A building has a 1000 square foot 1-bedroom unit on the fourth floor available for $1500 per month, and the building has a 2 bedroom penthouse unit on the 30th floor with 360 degree views of the city for $2500 per month. You choose the 1-bedroom. A year later, the landlord has started including bundling heat into the rent, and you learn that the penthouse is now available for $2000 per month. You decide to upgrade. Your monthly rent bill went up but prices clearly came down.
In the mobile world, there are lots of elements that make up the total bill. Do you have limited or unlimited calling? Nationwide or regional? US calling? Reduced international calling? How much full speed data is included? Do you have limits on text or multi-media messaging? What voice mail features do you have? Those kinds of factors are described in the Globe and Mail article as quality adjustments.
The apartment case is obviously a hypothetical, since rents in Canada have been going up. Indeed, one of the only components of the CPI that has been showing regular decreases has been the Communications Services component, especially the mobile services sub-component (as I wrote about last month here and here).
The Globe story quotes National Bank Financial analyst Adam Shine saying “All or nearly every Canadian could have found a better-priced plan in 2023”.
Personally, I have talked with my carrier twice in the past 12 months to discuss my own mobile plans. I cut my monthly plan price by 43%, and I now get more than 5 times the data and cross-border roaming. I helped a close friend lower her bills more modestly just before taking a week-long vacation to the US. She had 3 lines with 10-32GB of data; now they share 450GB and they have US and Mexico borderless service. Per line she is now paying 10% less. They migrated from a flanker onto the main brand. And, they are getting far more for less money, while incurring no roaming fees on their vacation this week.
“Statscan says cellphone prices are plunging – and they are.” There, I fixed the Globe’s headline