Story Tools: PRINT | Text Size: S M L XL | REPORT TYPO | SEND YOUR FEEDBACK

A cellphone by any other name smells like broadband

CBCNews.ca Staff

While cleaning out my inbox today, I came across Merrill Lynch's annual wireless matrix, a measure of cellphone revenues, prices and other statistics from around the world. Although the survey, which has near-Bible status in the wireless industry, was released in June, it's particularly pertinent given the report released today by Canada's biggest ISPs about how the country's broadband service is world-class by every measure. [UPDATE, Nov. 5: To clarify, the word "every" was used to sum up the fact that the report says Canada is a leader in all the major measures commonly used in international studies to compare broadband services among different countries - availability, user adoption, speed and price. It wasn't intended to be taken to mean literally every comparison that could possibly be made. You can read the full report, and its evaluation of a number of aspects of Canadian broadband as they compare to other services around the world, here.]

A few months ago, many of those same companies - Bell, Rogers, Telus - took umbrage with an OECD study that found Canadians pay some of the highest cellphone rates in the world. The OECD study found that medium users in Canada paid the third-highest rates, next to customers in the United States and Spain. Canadian carriers said the study used flawed methodology, which was based on European calling patterns. They cited Merrill Lynch's matrix as proof that prices were low - indeed, among the 22 developed countries rated by the bank, Canada had the fourth-lowest per-minute rate (about eight cents US). Canadians also have some of the highest monthly minutes of use in the study, with an average of 420 - third in the developed world, next to the United States and Hong Kong.

One thing the carriers didn't mention, though, is that Canada also scored third-highest in something called ARPU - or average revenue per user. ARPU is essentially how much monthly income a carrier earns per customer. Canada's $45.85 US rates third, next to the United States and Japan, according to Merrill Lynch. That third-highest ARPU certainly looks like the third-highest prices the OECD talked about (carriers in Germany, by comparison, earn an average of $19.81 from each customer, the lowest in Merrill Lynch's report).

Cellphone carriers have argued that high ARPU does not necessarily equal high prices - Canadians simply like to talk a lot, despite all the free calls they get on their landlines, so therefore they end up paying more for volume.

It's an argument that doesn't fly, though, when Canada is compared to countries with similarly low per-minute rates and high monthly usage, such as Hong Kong and Singapore. Both countries have comparatively low ARPU ($20.38 and $30.29, respectively). New Zealand is perhaps the best comparison to Canada. Customers there have free local calls on landlines and pay the exact same wireless rate per minute as we do - eight cents - yet only use 186 cellphone minutes per month. Monthly cellphone ARPU in New Zealand, however, is only $20.77 U.S., less than half Canada's.

What really makes the argument that high ARPU equals high prices in Canada is when gross domestic product per capita is figured in. Canada's GDP per capita, which is a general measure of a country's wealth per citizen, is $38,093 US, or nearly $10,000 lower than the U.S. or Japan, according to Merrill Lynch. In other words, while ARPU/prices in those two countries are higher than in Canada, so is the standard of living and, thereby, the disposable income.

None of this is even up for debate anymore, as the Canadian government decided our prices were indeed high nearly two years ago and moved to get new carriers to start up.

Merrill Lynch's wireless numbers are accepted by carriers while the OECD statistics are not, but ultimately they say the same thing. The ISPs are now similarly criticizing the OECD's findings on broadband. It's too bad Merrill Lynch doesn't have a broadband matrix because it'd be interesting to see if the same conclusions were reached there.

« Previous Post | Main | Next Post »

This discussion is now Open. Submit your Comment.

Comments

Mark Goldberg

Thornhill

In the ARPU analysis, you need to account for the extraordinary penetration rates in HK and Singapore. HK is around 163%, Singapore around 130% or more. So, the average user is actually paying for almost 2 ARPUs in HK and about 1.5 ARPUs in Singapore. This brings their cost per bill payer to about the same as in Canada.

International comparisons aren't easy. Read the report we issued today and you will see why we believe the OECD report is flawed.

Posted October 7, 2009 08:17 PM

Peter Nowak

Toronto

Actually, that's not true. If you account for multiple cellphone subscriptions per person in Hong Kong and Singapore, and you multiply the penetration rate by ARPU, you still come to $28.53 and $39.37 respectively, still considerably lower than Canada's $45.85. And both countries have GDP per capita similar to Canada's ($32K and $36K respectively, compared to our $38K).

In fact, if you factor penetration rates into ARPU among all 22 nations in the Merrill Lynch study, only two - Norway and Switzerland - come out a bit higher than Canada: $49.22 and $48.10, respectively. GDP per capita in both those countries, however, is considerably higher than Canada's at $77K and $61K. All four countries that have higher total ARPU than Canada also have significantly higher standards of living, as in an average of $10K+.

To go one step further - it's actually cheaper to own more than two cellphones in Greece (GDP per cap of $34K) than it is to have one in Canada. Greek ARPU for its whopping 214% penetration is $45.54, still lower than Canada's.

Posted October 8, 2009 11:05 AM

Mark Goldberg

Thornhill

Exactly how is it a good thing for Greece to have 214% mobile penetration? Doesn't that smell strange to you?

Besides, that means that the average Greek has more than 2 cell phones, pays for more than 2 phones per month and still uses their phone less (155 minutes average per phone per month) than the one phone carried in Canada (each has an average of 420 minutes).

Posted October 8, 2009 03:24 PM

Peter Nowak

Toronto

There is nothing strange or bad about Greece having a mobile penetration of 214%. It could mean many things - that Greeks carry one personal cellphone and one BlackBerry for work, or it could mean they have a cellphone and an internet stick/3G-enabled laptop. The country's poor broadband penetration (according to the OECD) is also likely a factor.

In a few years time, it won't be uncommon to see many countries with 200% or 300% penetration.

Posted October 8, 2009 03:52 PM

Ali

Toronto

Thanks for coming out, Mr. Goldberg. Even with the facts in front of you, you still can't help but spin it. It's slightly amusing.

Posted October 15, 2009 08:29 AM

Greek Geek

Most mobile users in Greece carry two cellphones, on for day-to-day bidness and one for exclusive use with boyfriend/girldfriend. Also in Greece, only caller pays for the call, not both parties like Canada. On landlines, both parties pay for calls. So 214% penetration for mobiles not so surprising.

Posted November 11, 2009 09:29 PM

« Previous Post | Main | Next Post »

Post a Comment

Disclaimer:

Note: By submitting your comments you acknowledge that CBC has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Please note that due to the volume of e-mails we receive, not all comments will be published, and those that are published will not be edited. But all will be carefully read, considered and appreciated.

Note: Due to volume there will be a delay before your comment is processed. Your comment will go through even if you leave this page immediately afterwards.

Privacy Policy | Submissions Policy

[an error occurred while processing this directive]
Story Tools: PRINT | Text Size: S M L XL | REPORT TYPO | SEND YOUR FEEDBACK

World »

Updated Commuter train crashes into N.J. station, killing 1, injuring more than 100 video
A commuter train plows into the bustling Hoboken rail station in New Jersey during the morning rush hour, killing at least one person and injuring more than 100 others, some critically. Some sources say the death toll could be has high as three.
Shimon Peres remembered as a visionary who worked tirelessly for Israel video
Israelis waiting in line Thursday to pay their respects to Shimon Peres, their former prime minister and president, remembered him as a man who dedicated his life to the country and recruited friends and allies from around the world to his cause.
Trump broke U.S. law with dealings in Cuba, Newsweek report says
Another bombshell has landed on Donald Trump's presidential run from Newsweek, which in a story released Thursday alleges the billionaire businessman broke U.S. law by doing business with Cuba.
more »

Canada »

Exclusive Her husband's sex assault trial ended with a bizarre twist, so this woman went public
In 2014, 74-year-old Isabelle Raycroft accused her husband of sexual assault. But when the trial took a bizarre turn, she lost hope for justice. So Isabelle decided to follow the lead of women in the Jian Ghomeshi and Stanford rapist cases — and go public.
What's next for Pacific NorthWest LNG project? 4 questions answered
Prime Minister Justin Trudeau and his cabinet colleagues have signed off on one of the largest energy infrastructure projects in the country's history but now attention turns to whether the Pacific NorthWest LNG terminal will actually be built.
New Canada's population tops 36 million as immigrants, refugees swell numbers
A record number of immigrants and refugees arriving on Canadian shores helped push Canada's official population over 36 million as of July 1, Statistics Canada says.
more »

Politics »

Canada needs a national price on carbon to meet emissions target: report
Days before Environment Minister Catherine McKenna meets with her provincial counterparts, a leading environmental group has released a report detailing how the provinces are doing and what they need to improve upon to meet their emissions targets.
Conservatives took payroll training responsibilities away from Phoenix creator IBM
The Conservative government took payroll training responsibilities away from IBM in the lead up to the implementation of Phoenix. A lack of training has been cited as a root cause of the Phoenix fiasco.
Analysis B.C. LNG project the latest Harper scheme to win Liberal nod
In green-lighting a massive natural gas project, the Liberals are approving a Stephen Harper scheme, and not for the first time. NDP Leader Tom Mulcair asks, "Is this what you meant by real change?"
more »

Health »

Sorry - we can't find that page
 
CBC.ca

Sorry, we can't find the page you requested.

  1. Please check the URL in the address bar, or ...
  2. Use the navigation links at left to explore our site, or ...
  3. Enter a term in the Quick Search box at top, or ...
  4. Visit our site map page

In a few moments, you will be taken to our site map page, which will help you find what you looking for.

more »

Arts & Entertainment»

Brad Pitt skips movie premiere to focus on 'family situation'
A producer says 'we all respect his privacy' as Brad Pitt skipped his first public appearance after last week's split with Angelina Jolie Pitt.
Video Deepwater Horizon explores riggers' side of the story video
Paying tribute to both the victims and survivors of 2010's massive BP oil spill was the goal of director Peter Berg and the team behind the new thriller Deepwater Horizon.
Agnes Nixon, creator of soaps All My Children and One Life to Live, dead at 93
Agnes Nixon, the creative force behind the edgy and enduring TV soap operas One Life to Live and All My Children, died Wednesday. She was 93.
more »

Technology & Science »

Canada needs a national price on carbon to meet emissions target: report
Days before Environment Minister Catherine McKenna meets with her provincial counterparts, a leading environmental group has released a report detailing how the provinces are doing and what they need to improve upon to meet their emissions targets.
New Whirling disease confirmed in six more locations near Banff National Park
Officials have confirmed whirling disease has been found at six more locations in waterways near Banff National Park.
Pesticide chemical found in animals along eastern coast, finds government study
Government research has found the presence of a chemical used in pesticides in fish, birds and a mammal from the St. Lawrence River to the south Florida coast.
more »

Money »

New Canada's population tops 36 million as immigrants, refugees swell numbers
A record number of immigrants and refugees arriving on Canadian shores helped push Canada's official population over 36 million as of July 1, Statistics Canada says.
New OPEC optimism holds as oil and stock markets maintain gains Thursday
Canadian stocks managed to hold their gains Thursday, a day after a surprising deal from OPEC nations to cut oil production bred optimism that crude prices may soon march steadily higher.
Wells Fargo CEO John Stumpf tells U.S. lawmakers bank is eliminating sales goals on Oct. 1
Wells Fargo's CEO, newly stripped of tens of millions in compensation in a scandal over sales practices, told U.S. lawmakers that the bank will end all product sales goals by Saturday.
more »

Consumer Life »

Sorry - we can't find that page
 
CBC.ca

Sorry, we can't find the page you requested.

  1. Please check the URL in the address bar, or ...
  2. Use the navigation links at left to explore our site, or ...
  3. Enter a term in the Quick Search box at top, or ...
  4. Visit our site map page

In a few moments, you will be taken to our site map page, which will help you find what you looking for.

more »

Sports »

[an error occurred while processing this directive]
Preview Europe's Ryder Cup team fuelled by inferiority complex
With the Ryder Cup set to tee off Friday, the United States once again has the "best" team on paper. But that hasn't stopped Europe in recent years, and the so-called underdogs are gearing up for another fight to prove they belong.
Sidney Crosby cementing place as 'best player of his generation'
Canada's captain Sidney Crosby has been the strongest player at the World Cup of Hockey, proving his elite status in the best-on-best tournament.
Coming Up World Cup of Hockey final: Canada vs. Europe video
Watch live at 7:30 p.m. ET as Canada faces off against Europe in Game 2 of the World Cup of Hockey final in Toronto.
more »

Diversions »

[an error occurred while processing this directive]
more »