As parliament members delve into the affordability of telecom services, recent data underscored a consistent decline in cell phone and internet costs, contributing to a reduction in national inflation rates for February 2024.
Consumers who subscribed to cell phone plans in February experienced a notable decrease in costs, with a year-over-year drop of 26.5%, following a similar trend observed in January, which witnessed a 16.4% decline.
The decline in costs is attributed to lower prices for new plans and expanded data allowances for certain cellular service packages.
Statistics Canada (StatCan) reported a 13.2% year-over-year decrease in internet access prices for February, along with a 9.4% month-over-month reduction, citing special provider offers as contributing factors.
The decline in telecom prices, reflected in the national inflation report, suggests consumers are benefiting from enhanced offerings such as larger data packages, international roaming perks, and voice-to-text voicemail services.
StatCan's findings revealed a 2.8% overall annual inflation rate in Canada for the previous month, with cellular and internet services identified as key drivers behind this decrease.
Over the past five years, from January 2019 to January 2024, StatCan data highlighted by the Canadian Telecommunications Association indicated a substantial 47% decline in cellular service costs.
According to association spokesperson, Nick Kyonka, amid rising costs across various sectors, intense competition within the telecom industry has led to significant price reductions in both cellular and internet services.
The affordability of telecom services has become a prominent issue under scrutiny by the House of Commons industry committee.
Concerns arose in January when Rogers Communications Inc. announced a USD 5 average price hike for select wireless customers, prompting attention from MPs, while Bell Canada customers also faced potential wireless bill increases.
During committee sessions, testimonies from the CEOs of Rogers, Bell, and Telus Corp. underscored the downward trajectory of phone and internet prices. However, it was highlighted that amidst escalating data usage trends, some customers may not recognize these price reductions.
While major telecom companies offer plans with reduced costs per gigabyte, these often include large data allowances that may exceed customers' needs.
It's important to note that StatCan's report captured changes in customer bills, including those who switched carriers or renegotiated existing plans. This could potentially influence how price changes are perceived over time.