This morning, American media got all frenzied about a new rule imposed by the Canadian government. Starting December 1st, all cellphones bought from a cell carrier in Canada have to come unlocked out of the box, and the carriers can’t charge a fee for the service.
This is a great and much-needed thing for Canadian consumers. But Americans don’t really need to worry about losing the “land of the free” competition any time soon: although you might still have to pay a fee to unlock phones in America, at least the networks don’t massively suck.
Just like in the US, Canada is dominated by a couple large wireless providers. There’s Bell, Rogers, and Telus that cover all of Canada, and a handful of smaller companies that only have a network in one region or province.
But unlike the States, where the different cell networks offer a different kind of service for a different amount of money (Verizon good but expensive, Sprint cheap and bad), all the big carriers in Canada offer suspiciously identical service for a suspiciously identical price.
There’s no unlimited plans, no cheap prepaid plans, and certainly no “all taxes and fees included” plans. Instead, Canadian cell carriers provide good (but hilariously expensive!) service on long contracts.
This isn’t just a bitter expat ranting at the clouds: a study by the CRTC, the same Canadian government body that just banned locking phones, found that Canada’s cellphone bills are the highest of any developed Western country. To give you an idea, a two-year 5GB/month plan on Rogers with no device payments runs about US$110/month.
In fact, the Canadian cell plans look a lot like America’s did 10 years ago. The business is still centered around buying phones on two-year contracts that are difficult and expensive to break.
Worst of all, there’s basically no discount for bringing your own phone to a network. Buying an iPhone at the Apple Store and then buying a SIM card only saves you $5-10 a month on your cell plan, compared to just buying a cell plan that includes paying for an iPhone.
What that actually means is that Canada’s shiny new cellphone unlocking service isn’t going to help anything. As long as it’s cheaper to buy a phone on-contract than from a store, people are going to remain tied into stupidly long and expensive contracts. The lack of mobility to change carriers is what really hurts competition, as people just stay on the same carrier rather than hunting around for deals every year.
Americans know all of this, because it’s what the American cell industry looked like a few years ago. It’s only since service contracts and on-contract phones started to die off that competition became fierce, and we started seeing prices fall and unlimited contracts return.
So yes, the Canadian government has done a good thing and made sure that all phones will be unlocked for free. But really, the only people that’s going to help are the snowbirds who flee Montreal for Florida every winter and want to buy a T-Mobile SIM while they’re down. For everyone else, it would be more helpful if the government could address the underlying lack of competition, rather than rearranging the deck chairs while everyone keeps paying $140 a month for cell service.
