Canada Still Trails Other Counties in Mobile Phone Penetration

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Canada Still Trails Other Counties in Mobile Phone Penetration

6:10 am on July 23, 2008 | Category: Telecom Services, Wireless, Cell Phones

Canada continues to lag behind other developed nations in mobile phone ownership, according to a new TNS Canadian Facts survey covering 30 countries.

Only 69% of Canadians aged 16 to 60 currently own a cell phone, compared to 90% in the United States and 97% in the United Kingdom.

“Canadians do not have the same attachment to … mobile phones as the rest of the world does,” commented TNS senior vice president, Michael Ennamorato, noting that high quality landline access throughout the country is sufficient for many customers.

Low penetration rates in Canada, however, have prompted a number of companies to aggressively bid for spectrum in the federal government’s latest wireless spectrum auction. A total of $4.25 billion was raised by the sale, which was initially expected to fetch only $1.5 to 2 billion.

But many analysts remain skeptical of such inflated prices for spectrum, noting that most Canadians who do not currently own a cell phone have no plans to buy one within the next 12 months. This group of disinterested consumers, classified as “rejectors” by TNS, includes 23% of those surveyed.

Canadians who do use cell phones, meanwhile, generally tend to choose lower-priced models with less fancy features, and keep the same phone for longer than most consumers (3.5 years on average). Most Canadian cell phone owners are on their third handset, while most users in Hong Kong and Britain are on their sixth.

Mr. Ennamorato explained that wireless carriers standard practice of requiring customers to sign 3-year contracts in exchange for heavily subsidized handsets, may have contributed to these trends.

“There are clearly segments of the Canadian wireless population that are leading-edge, and want the latest and greatest, but on balance there is a certain inertia in this market,” he said.

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I am getting sick and tired of hearing media outlets and analysts talking about the “low” cell phone penetration in Canada. Obviously the penetration is low. And it has nothing to do with our geography, our population or the fact that Canadians do not want a cell phone.

Look at every single plan you can get in Canada from every single provider, the subsidies that are attached to the phone you buy when you sign a 3 year contract compared to a 2 year, and the fact that there is no government agency regulating the devious and deceitful practices of Canadian’s telecoms.

If you ask every person in Canada who has a cell phone whether or not they feel they are being overcharged or have had billing issues over the course of their contract, I’m sure the majority would say yes. If you asked every Canadian who doesn’t have a cell phone why they don’t have one, I’m sure a great number would say they don’t want to sign a 3 year contract, and can’t afford to pay the ridiculous subsidy different between 2 and 3 year contracts (some phones, as an example, cost approx. $50 on a 3 year and approx $300 on a 2 year).

Cell phone penetration is low in Canada because of the lack of competition, plain and simple. Everyone in Canada is angry about high rates, jealous of the US for low rates, and wishes they had another choice, which they don’t.

Comment by Andrew — July 23, 2008 #
I have recently moved back to Canada after living in Europe and can completely understand why cell phone penetration is so low in this country.

I have been comparing the different companies and packages they offer, but no one is able to provide me with exactly what I need and the prices for what they are offering are outrageous. In the other countries in which I have lived, any number of service providers would offer better packages at much cheaper rates.

Only when competition increases, prices fall and suppliers offer customers what they really want (not what the suppliers are willing to offer) will Canadians embrace cell phones in the same way as other nations.

Comment by Paula — August 6, 2008 #