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Thursday
Jun092011

Canada mobile data roaming fees - another sad story?

The OECD released data guaranteed to cause anxiety and anger among Canadian mobile users. This time it is targeted at mobile data roaming fees. The OECD press release included a chart that ranks Canada as the most expensive country to have your mobile data service from when travelling. The OECD called on regulators and policy makers take action to bring down data mobile roaming fees.  

The OECD report accompanying the press release has more information and it is worth taking a closer look.

First, the data given in the press release is a simple average of all the data rates that apply when roaming in each of the 34 OECD countries. If there are a few countries where data roaming rates are high, this will push up the average even if these are not frequent destinations for Canadians.  A proper comparison would have weighted the prices by relative volumes or value for each destination. This information was not available for the OECD report.

Most Canadian travellers visit only a handful of countries and the vast majority of our visits – more than 70% in 2009 – are to the United States. (Statistics Canada provides a list of the top 15 countries.)  A simple average of all the rates does not match this reality.

Second, the press release comparison is based on using a single MB. Data usage on most mobile devices is considerably higher.  For example, Cisco recently reported that data usage across all mobile devices in Canada averaged 4 Petabytes per month in 2010. This equates to 4 trillion MB per month. Compared to the 5.7 million mobile broadband subscribers in Canada, the average mobile broadband subscriber consumes more than 750 MB of data each month, or about 25 MB daily. Undoubtedly, only a fraction of that would be outside of Canada, but it gives an order of magnitude of typical daily use.

Third, the press release also focused on prices for a single user-initiated data session, within one day.  The travel information provided by Statistics Canada referenced above indicates that Canadian visits to other countries typically last at least one week.  A price comparison based on use within one session or day does not match reality. While the prices for Canada plans do not vary if the use occurs within one session or multiple sessions, there are significant differences in other countries (notably Japan).

In fact, the detailed OECD report included fees for data usage that allows us to overcome all the shortcomings of the press release comparison. There are prices for the least expensive destination - also the most popular destinations; for higher levels of usage (5 MB and 20 MB); and with usage spread over multiple sessions during a week or month. It is illuminating to consider the results of the price comparison based on these scenarios.

The following chart compares Canada to the other G7 countries and the OECD average for the 5 MB and 20 MB prices.


All prices are in U.S. dollars converted to Purchasing Power Parity.

Canada has the second cheapest price for the 5 MB usage and the least expensive for those using 20 MB over multiple sessions among the G7 countries.  

Compared to all the OECD countries, Canada ranked seventh in terms of lowest price for the 20 MB plan. Canada’s prices came in 13th place for the 5 MB plan, but in a virtual tie with the five countries that placed ahead of Canada.  

Canada’s mobile data roaming prices are not as far out of line as the OECD press release would have us believe. At least, not when doing the comparisons based on more realistic scenarios.

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