Across all income levels, in 2014, Canadians spent roughly the same amount of money per person on communications – in the order of $80 per person per month for phone, internet and TV.
That was the result of doing a little arithmetic on the data released by the CRTC last week.
| Characteristics | First quintile (household income less than $30,668) | Second quintile (household income from $30,669 to $51,804) | Third quintile (household income from $51,805 to $79,722) | Fourth quintile (household income from $79,723 to $121,291) | Fifth quintile (household income over $121,292) | Average of all quintiles |
|---|---|---|---|---|---|---|
| Average annual income | $18,582 | $41,105 | $64,854 | $98,634 | $199,702 | $84,575 |
| Members per household | 1.49 | 2.11 | 2.49 | 2.95 | 3.34 | 2.48 |
| Communications expenditures as a percentage of annual income | 8.3% | 4.9% | 3.8% | 2.8% | 1.7% | 2.9% |
Sources: Statistics Canada’s Survey of Household Spending
I did a little more analysis on that table, using simple arithmetic to derive the following:
| Characteristics | First quintile (household income less than $30,668) | Second quintile (household income from $30,669 to $51,804) | Third quintile (household income from $51,805 to $79,722) | Fourth quintile (household income from $79,723 to $121,291) | Fifth quintile (household income over $121,292) | Average of all quintiles |
|---|---|---|---|---|---|---|
| Average Communications Bill | $1,542.31 | $2,014.15 | $2,464.45 | $2,761.75 | $3,394.93 | $2,452.68 |
| Annual Bill per Person | $1,035.10 | $954.57 | $989.74 | $936.19 | $1,016.45 | $988.98 |
| Monthly Bill per Person | $86.26 | $79.55 | $82.48 | $78.02 | $84.70 | $82.42 |
One of the factors impacting the higher cost on a per person basis in the lowest income quintile may be the smaller average household size – just 1.49. While mobile services are sold to individuals, other services (TV, home internet, wired phones) are sold to the household. The slightly higher cost of communications on a per person basis in the lower income levels might be attributable to a “single supplement” effect – a higher cost per person due to living alone.
Telecom service provider marketing departments and social service agencies alike need to consider household sizes as they examine ways to help make services more accessible for these lower income quintiles.
Smaller household sizes would also be an explanation for why lower income households have a greater tendency to be wireless only. The CRTC suggested that it may be an issue of affordability:
Yet as Canadians embrace mobile wireless, a more precise picture emerges when examining this trend across income quintiles. For instance, wireless-only households are most prominent among the two lowest income quintiles … This suggests that the rise of mobile-only households does not solely reflect changing preferences but may also be driven by affordability.
It is important to look at the significant differences in size of household across the income quintiles. With small households, affordability may not be the most important factor driving wireless-only choices.
In the case of single member households, at any income level, going “wireless only” is just plain common sense.