Take a minute to read this great article on why mobile internet in Canada isn’t being adopted as widely as in other countries.
Blogger/Analyst Chetan Sharma set out to discover what drives the usage wireless data services. By comparing the cost of wireless data services, the average amount of money spent by each user, and wireless revenues as a percentage of total carrier revenue, he arrived at one conclusion. If carriers charge less for mobile data services, more customers will use them, they’ll be used more often, and carriers will make a lot more money.
The article I’ve posted deals directly with the impact of this study on Canadians. If you don’t have time to read the entire article, take a look at a few excerpts below:
“How is it that UK carriers can be generating such high revenues, compared to Canadians, when their prices are so low?
The answer, of course, is price elasticity. Because the cost of mobile data is so high, Canadians automatically use their data plans much more conservatively than folks in many other parts of the world. We don’t surf the mobile web, stream video, or upload photos from our mobile phones. We don’t buy music, or use YouTube. We don’t use mobile mapping systems, or location based services, either. Remote telemetry? Forget about it. ECommerce via phone? Likewise. For us, mobile data means parsimoniously receiving a few wizened BlackBerry messages, stripped of all their multimedia content in order to use the minimum possible number of precious packets on the carriers networks.”
An interesting note here. I mentioned in a previous post that ISPs are beginning to test the waters with consumption based billing. There are several possible outcomes of that type of billing structure. One possibility bares a striking resemblance to the evidence presented by this analyst. ISPs may actually stand to lose money as customers micromanage their internet usage just as Canadians are doing with mobile internet.
”Lay the blame at the feet of those who control the pricing of wireless products - the cartel of Rogers, Bell and Telus. Lay the blame also at the feet of the CRTC and Industry Canada, who have failed to take the necessary steps to ensure that the Canadian market remains healthy, and that Canada remains competitive globally.”
The choice of the word ‘cartel’ is interesting and well deserved. The pricing tactics of Rogers, Bell, and Telus amounts to nothing less than corporate gangsterism. This oligopoly’s control over television, internet, phone, and mobile services leaves much to be desired by consumers.
Greed and the poor decisions of wireless carriers are fueling the degridation of Canada’s information technology infrastructure and services. Changes must be mandated, and responsibility must be shared between the government and corporations alike.
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