High fees curb Canada's cellphone use: study

Canadian cellphone users are paying more than people in any other developed country, says a report that claims the high wireless service costs have stalled the widespread use of mobile devices.

The average cellphone bill in Canada is one-third more than it is in the United States and the highest of 30 countries in the Organization for Economic Co-operation and Development, according to a report released Monday by the Seaboard Group, a Canadian company that provides research and consulting services to the telecommunications and information technology sectors.

While relative costs have dropped since Seaboard's 2005 study which found Canadians paid 60 per cent more than Americans the group argues the high prices are still an impediment to increased adoption of mobile technology.

"Canada is dead last in the 30-country OECD measurement of wireless penetration. Oddly enough, Canada's wireless prices lead the world there may well be a correlation," the report said.

Canada has 56 cellphones in use for every 100 Canadians, a level of adoption that lags behindevery other developed country, the study found. The United States has 75 in use for every 100 Americans, while Britain and Germany have 102.2 and 86.4 in use per 100 people respectively.

Accusations of bias

Telus Mobility vice-president of wireless, broadband and content policyMichael Hennessy dismissed the study, saying he viewed it as the first salvo in an attempt to allow other companies to piggyback on local carriers and enter the wireless industry.

"Thereis tremendousbias in this study," Hennessy told CBC News Online. "They suggest, for example, that Canada lags behind countries like Turkey and Botswana in wireless penetration, conveniently ignoring that those countries have virtually no land-line services."

Hennessy also said the European figures are distorted by higher land-line rates and the practice among European wireless users of having more than one cellphone plan to avoid roaming charges.

Thereport broke down cellphone users into three groups: heavy, average and light users.

Heavy users were getting the worst deal, the report said, with costs 50 per cent more in Canadathan in theU.S. Canadian light users fared much better, paying 27 per cent less per month in Canadathan in the U.S.

Kill long-distance fees, report urges

The authors of the report recommended Canadian wireless carriers kill long-distance fees, reward customers for signing up friends and expand usage ceilings to attract new customers. They also suggested the government should allow and encourage outside competition in the industry.

Toronto-based Rogers Wireless is Canada's largest wireless carrier, ahead of Vancouver's Telus Corp. and Montreal-based BCE's Bell Mobility.

The Canadian Wireless Telecommunications Association said on Monday the number of wireless phone subscribers at the end of 2006 was 18.5 million, with wireless penetration in major urban centres at more than 70 per cent.