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Telus' Honorable Flacks
Written by Dave Burstein   
Saturday, 18 June 2011 16:46
The OECD report says the U.S. and Canada have some of the highest wireless prices in the world. Canadian wireless carrier Telus doesn't like that conclusion, so hired Nordicity to do aTelus_Nordicity survey using different assumptions than OECD. The Nordicity survey found Canadian prices, measured Nordicity's way, are actually lower than the OECD average. No surprise; there are so many different wireless plans and so many different way to measure a good analyst can "prove" many contradictions.
      Nordicity's put "Prepared for Telus" in large print on the title page. They also were clear about the assumptions they used, such as adjusting the figures for the higher income in Canada. The Toronto Sun reported fairly, noting in the first sentence "according to a new report paid for by Telus Corp that challenges the widely held view that Canadians pay too much for wireless." With that said, reporter Stefania Moretti is comfortable including the report's conclusion "Canada has one of the six most competitive wireless market structures in the OECD. Canada is one of only six OECD countries where two leading providers serve fewer than 70% of customers and the top three serve less than 95%."
     That most countries have very limited wireless competition corresponds to Ralph de la Vega's comment that "the U.S. has one of the most competitive wireless markets in the world." Nearly everywhere else has fewer than out four national companies. I checked the data and confirmed that Ralph is accurate. Consumers in the U.S. pay $billions more since we went from six to four carriers, suggesting to me competition is not strong enough to do away with regulation. For nearly a century, economists assumed that telecom was a "natural monopoly" and therefore needed strong regulation. That wave changed in the 1990's and "competition" and markets were raised as the only way to go. The truth is neither; telecom is a business of scale, which means it will tend toward less competition and therefore more need for regulation of some sort.
     Takeaway from Moretti "The influx of new competitors in the wireless market has helped lower rates for Canadians who paid some of the highest fees in the industrialized world."