Canadian Government Tells “Big Three” Wireless Carriers To Cut Bills By 25% Or Else…. And Their Plan Is A Joke

The Canadian Government appears to be going the brute force approach to deal with the fact that wireless carrier bills are insanely high. They’ve put out the following this afternoon. You can find out more via this link to the CBC but here’s the highlights:

  • Canada’s big three national wireless providers have two years to cut their 2-6 GB plans for cellphone services by 25 per cent. This would apply only to post-paid plans where consumers already own their devices or purchase a new one at full price.
  • If the “big three” don’t do this, the government will introduce regulatory measures to bring about those price cuts.

Here’s my thoughts on this and they can be summed up in four words: Good luck with that.

The Canadian Government has come up with a plan that would only help a handful of people. As in most people get their phones via finance plans with their carrier. I am one of the few people who buy their phones outright. Not only that, I would very surprised if the “big three” obeys the government. Seeing as one of the big three, namely Telus, has threatened a form of retaliation if the Canadian Government tries to mess with with wireless prices. And if the Canadian Government does impose some sort of change, expect that to go to court and be tied up there for years.

Are wireless prices high? Yes. Insanely so. And this needs to be addressed. But this isn’t the way to do it as it really doesn’t solve the core issue. Which is that there’s an oligopoly in the Canadian wireless industry. And this is how you solve it:

The only way to lower cell phone prices for Canadians is to have the Canadian government let in a very large foreign telco or telcos such as Deutsche Telekom or Vodafone, and have them set up shop in Canada. And by set up shop, I mean build their own infrastructure. Now to be clear, I am NOT advocating that the government should bankroll these companies. What I am advocating is that they simply have to open the door and let them walk in and set up shop. The simple act of doing that will see wireless prices drop in this country to levels Canadians have never seen before. Why? Because for the first time there will be real competition in the wireless space. If you don’t believe that this would happen, look at the panic that Verizon caused the “big three” telcos when they were rumored to be expanding into Canada a few years ago. Face it, the “big three” telcos would lose their minds if a big international player were to move in and set up shop in Canada because they know that there is no way on God’s green earth that they could get away with charging Canadians what they currently charge in such an environment.

If the Canadian Government really wants to solve this issue, they should take my advice as that would actually solve the issue. After all, it benefits the many and not the few. And isn’t that what they want?

 

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