Authored by Nikhil Aggarwal, Growth PM for Nomad
May 11, 2021
Read Time: 5 mins
TL:DR: The Canadian government announced in March of 2020 that they will be expecting the Big 3 carriers to reduce the costs of three of their main low-data plans by 25% within the next two years, ensuring that there are plans available for Canadians for less than $40 (spoiler alert, you can already get a plan WITH DATA for just $15 CAD - check out our tips and tricks here on how you can do this today). Recently, in April of 2021, the Canadian government made an additional effort to open up the MVNO market in Canada and increase the number of wireless providers in areas where there is low competition today. What this means to Canadians is that soon, there will be many more options for mobile phone plans in Canada and lower rates than ever before. Read on for the full details!
For the longest time, Canada’s biggest mobile operators: Bell, Rogers, and Telus have been oligopolies (or monopolies in certain regions of Canada) that have provided some of the highest cost mobile data plans in the world. In Canada, the average cost of 1GB of data is over $12, almost 120x more expensive than the lowest cost country (Source). Although some low-cost carriers have entered the space, such as Fido, Public Mobile, Koodo, and Dot Mobile, the Big 3 wireless carriers still controlled 90.3% of market share in Canada in 2019 (Business Wire).
This means that most Canadians have been and are continuing to pay exorbitant amounts of money for their monthly phone bills. During the pandemic, this has put financial strain on families who may have lost income or experienced financial hardship due to the pandemic’s impact on the economy. This appears to be the reasoning behind the Canadian government’s move in March 2020 to put pressure on the Big 3 carriers to reduce costs by 25% to end consumers over the next 2 years, with threats to take regulatory action if they choose not to do so.
Now again, in mid-April of this year (2021), the Canadian Radio-television and Telecommunications Commission (CRTC) announced a new initiative to enable “certain telecommunications providers [to] be able to access the wireless networks of Canada’s dominant providers to offer Canadians more choice and affordable options” (CRTC). MVNOs have done wonders at reducing mobile costs in countries similar to Canada in the past. In the United States, for example, Visible Mobile (an MVNO by Verizon Wireless) has been able to offer unlimited talk, text, and data plans to customers for as low as $25 / month with no contract. The data itself comes from Verizon’s network, arguably the highest quality 4G and 5G network in the U.S.
In Canada, it’s hard to say exactly what the initiative from the CRTC will invoke in the Canadian wireless market. Due to the fact that wholesale agreements will have to be negotiated directly with the Big 3 operators, Rogers, Bell, and Telus still hold significant power over the new entrants into this market, as they control the base network that any new provider will be leveraging to offer service to the end customers. However, the CRTC does have a plan to get around this - the CRTC is requiring that all of the Big 3 carriers “must report back to the CRTC every six months, on their low-cost and occasional-use plan offerings. The Commission will make these reports available on its website to ensure transparency and accountability to Canadians.” (CRTC).
Nevertheless, the CRTC encourages people to contact their mobile providers and “shop around,” We know it’s not that easy, though - just check out this story about how a Canadian recorded 3 Bell representatives offering the exact same deal to him, only for him to find out that the deal doesn’t actually exist.
At the end of the day, we’re hopeful for Canadians that the new regulations are a step in the right direction to bring down the cost of mobile plans and make this utility (and undoubted necessity) more accessible and affordable to people. In the meantime, we have published a separate blog post on how Canadians can leverage existing products to get an extremely affordable plan with 40% lower data costs - that blog post is here.
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