Cost of basic Canadian cellphone plans continue to rise as larger plans see a decline

Despite the introduction of new laws by the federal government that allow Canadians to cancel their cellphone contracts after two years rather than three, the prices of basic plans have continued to rise.

According to the Wall Report, an annual telecom services price comparison study commissioned by Industry Canada, the laws have brought down the prices of larger cellular plans while the cost of basic plans have increased to make up the difference.

The laws were put in place in December 2013 to encourage competition between cell carriers, as consumers would find it easier to change or cancel their plans if they found something more appealing on the market. However, with carriers now seeking to recoup the cost of a three-year plan over a two-year time period, that means higher prices on the low end of the spectrum.

According to the report, the monthly charge for basic mobile wireless service rose to $36 in 2014 from $31 in 2013, and $34 in 2010. However, for those on high-volume plans, prices dropped from $110 in 2010 and $94 in 2013, to $80 in 2014.

“The reduction of contract terms placed upward pressure on service plan prices given there is now a shorter period available to recover the handset subsidies,” said the report.

While some improvements have been made, Canadian prices remain much higher than those in other countries.

For example, a basic plan in Italy would cost $10.85 a month, while the same would be $35.70 in Canada. For a so-called “unlimited” plan, it would cost you approximately $92 a month from Telus, Bell or Rogers – $42 higher than what a similar plan would be in France.

In addition, in this year’s study, a comparison of Canadian and U.S. cross-border roaming rates was also conducted. The report found that the U.S. incumbents’ average base roaming call and text rates in Canada were found to be lower than the Canadian incumbents’ comparable roaming rates in the U.S., whereas the reverse was found to apply in the case of data roaming rates.

Read the full report here.

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