Here’s how much Canadian wireless bills will climb in 2015
The incessant climbing of wireless bills has become a well-established grumble among Canadian consumers, and this year shouldn’t change that.
Wireless bills among the country’s big three service providers, Rogers, Bell and Telus, are poised to continue their nearly uninterrupted march higher in 2015, according to fresh estimates.
Analysts at financial services firm Desjardins Securities suggested in a research note on Tuesday, the average revenue per user collected by the Big Three each month (dubbed ARPU) will grow by 1.3 per cent as a group this year.
That’s a rough proxy for how much bills will rise on average. Not a surge exactly, but it stands as the second-best annual gain for the big carriers in the past five years.
Last year, industry ARPU climbed 1.7 per cent, according to Desjardins. Customers of Rogers, the largest carrier in the country by subscriber numbers, pay $59.70/month on average. At chief rival Bell, the average bill has jumped to $61, and at Telus bills average $63.60 each month.
If Desjardins’ estimates prove correct, Rogers will earn 60 cents more a month from each wireless subscriber on average this year; Bell will collect $1.28 more; while Telus will lift its average bill by 82 cents.
Fourth year of growth
Average wireless bills are set to rise again for a fourth straight year following a decline in ARPU among the major carriers between 2009 and 2011 – when newcomers like Wind and Mobilicity were aggressively undercutting prices, forcing Rogers, Bell and Telus to respond.
Both startup carriers have struggled to win meaningful numbers away from the Big Three, though, with Mobilicity now operating under bankruptcy protection and Wind under new ownership.
“While competition remains fierce for subscribers, we believe price competition has receded enough to allow [Rogers, Bell and Telus] to deliver improved profitability,” Desjardins telecom analyst Maher Yaghi said.
More data usage
Rogers, Bell and Telus say higher bills are a result of more customers chomping through more data on their phones.
“Telus is seeing data usage double every 18 to 24 months, with consumers likely having to migrate to more expense plans,” Robert Bek, a CIBC analyst, said in a recent research note.
But Bek added, “There’s no doubt that price is also a consideration.”
The analyst said it’s a function of competition, or rather the lack of it, that’s allowing big carriers to resume pushing through higher prices – already deemed expensive by other countries’ standards. The big players have far bigger, faster and more robust networks which have let them successfully convince customers to avoid the little guys and go on using up more data with them, even if it means paying a premium to do it.
Rogers, Bell and Telus do face competition – among one another, Bek said. But evidence of that isn’t showing up where customers can most visibly see it: on their bill.
“Competition is definitely aggressive, but not fierce, given we still don’t see it show up in pricing plans.”
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