Windsor Star

Phone costs jump most since 1983

- GERRIT DE VYNCK

OTTAWA — Prices for Canadian phone service have risen at the fastest rate in more than 30 years amid a debate over whether the wireless industry needs more competitio­n.

The cost of mobile and landline communicat­ions climbed 7.6 per cent in August from a year earlier, more than three times general inflation, as the biggest phone companies pulled back on promotions and moved to shorter contract lengths.

According to Statistics Canada, the jump was the greatest since March 1983, the same year Motorola Inc. debuted the first commercial­ly available mobile phone. Last month’s increase helped boost the core inflation rate to 2.1 per cent, the highest since April 2012, the statistics agency reported last week. The federal government has been pushing for more than six years to encourage a fourth mobile-phone carrier to compete nationally in the wireless market with Rogers Communicat­ions Inc., Telus Corp. and BCE Inc. The Big Three, which control 90 per cent of subscriber­s, argue more competitio­n would endanger their multibilli­on- dollar investment­s in new cellular towers and fibre-optic cables.

Wireless prices have general- ly declined in the last few years for all but entry-level plans, according to a March 2014 report from Wall Communicat­ions Inc. The average price of a plan with 1,200 calling minutes and one gigabyte of data fell to $80 in the beginning of 2014 from $110 in 2010, the report said.

“We will continue to support policies that promote more choice and better services in the wireless sector,” said Jake Enwright, a spokesman for Canadian Industry Minister James Moore.

Phone prices, including landline subscripti­ons, have risen in all but eight of the past 56 months dating back to January 2010, albeit at a slower pace than in August, according to Statistics Canada. Before last month, they had averaged 0.6 per cent increase this year.

Canadians are using more data and paying more for devices as they upgrade to higher-end smartphone­s, meaning more of their monthly spending goes toward phone services, Kevin Chu, a Toronto-based analyst at Accountabi­lity Research, said by phone.

On top of that, carriers are raising prices to recoup money spent on subsidizin­g phones for two-year contracts, Chu said.

In December, new government rules forced carriers to stop offering three-year contracts, which let them spread the costs of expensive smartphone­s over a longer time.

 ?? DARREN CALABRESE/The Canadian Press ?? The cost of Canadian phone service has climbed at the fastest rate in over 30 years as big phone
companies have scaled back on promotions and shifted to shorter contract terms.
DARREN CALABRESE/The Canadian Press The cost of Canadian phone service has climbed at the fastest rate in over 30 years as big phone companies have scaled back on promotions and shifted to shorter contract terms.

Newspapers in English

Newspapers from Canada