Telecom CEOs defend wireless industry in front of MPs

Article content

OTTAWA – The heads of Canada’s major telecommunications companies told MPs that they have been lowering mobile prices despite government policies that make things more expensive.

The CEOs of Rogers, Telus and Bell appeared before Parliament’s industry committee Monday to defend their industry amid concerns about high prices in Canada. All three companies argued that the prices for mobile service are coming down even as inflation drives up the prices for nearly everything else.

Article content

Article content

Bell CEO Mirko Bibic said Canadians are seeing lower prices due to competition in the industry.

“Canadians pay much lower prices for wireless internet today than they did just a short time ago,” he said. As prices have fallen, Bell has significantly increased how much data customers receive each month. For an average Canadian using between five and seven gigabytes of wireless data per month, prices have fallen nearly 30 per cent.”

MPs invited the CEOs to committee after Rogers increased prices on select mobile plans in January by as much as $9 per month. When the federal government greenlit the company’s takeover of Shaw Communications last year, it was conditional on the company offering low-cost wireless and internet plans, keeping a significant presence in Calgary and making large investments in wireless coverage.

While not in the formal agreement, Rogers also pledged to lower 5G data prices by 30 per cent.

The company also sold off Shaw’s wireless division, Freedom Mobile to Videotron as part of the sale, and that Videotron lower prices.

Rogers CEO Tony Staffieri said the January increases were for a small percentage of customers who were no longer covered under a contract, with most paying much less than the $9 increase.

Article content

Article content

“Those changes were to a small percentage of our customer base. The average was $5, and most of those customers were at $4 or less,” he said.

He said Canada’s market is competitive with customers now having many options of providers.

“This country has very robust and healthy competition. Our consumers have choice here. Last year alone, 4.9 million Canadians switched their provider.”

Staffieri said while prices are falling, Canadians are using their phones more than ever before which is why some people have seen their bills rise.

“I think what you’re seeing is a massive increase in data consumption. Canadians are amongst the highest data consumers in the world.

Telus CEO Darren Entwistle echoed his competitors on prices, but added that one of the factors that drives up costs in Canada is how the government divides up the market.

The federal government holds regular spectrum auctions to license the bandwidth that cell phone companies need for their services. Entwistle pointed to a 2021 auction for the spectrum used for 5G services which brought in nearly $9 billion for the government.

Article content

“In contrast, in Japan and South Korea, they gave away the spectrum. So that operators can concentrate their spend on deployment,” he said.

Entwistle said the cost of spectrum gets passed along to consumers at a price he estimated at about $100 per customer per year.

“That fee is across the board that fee reflects the fact that Canadian wireless operators have historically paid the highest prices for spectrum through successive spectrum auctions,” he said.

MPs also questioned Bibic, and Bell’s decision earlier this year to lay off workers despite posting significant profits.

“You also recently cut nearly 5,000 Canadians from a job. So can you explain your record profits and your market share and also your commitment to your employees when you laid off 5000 Canadians,” NDP MP Brian Masse asked.

Bibic said Bell has to make changes to reflect more competition in the marketplace. He said they didn’t take the decision lightly.

“What worked three years ago, five years ago, or 10 years ago in Canada, no longer works, so we have to adjust,” he said.

Some of Bell’s recent layoffs were in the company’s news division CTV and the company ended several local newscasts and its investigative program W5 as part of the changes.

Article content

Bibic said news costs the company significantly and they’re still looking for ways to invest in it, but things have to change.

“I’ve shared the next stat publicly many times. We incur more than $40 million in losses in news per year. Despite that, we continue to invest in news and we continue to invest in our media division,” he said.

National Post
rtumilty@postmedia.com

Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark nationalpost.com and sign up for our daily newsletter, Posted, here.

Article content