Five hundred gigabytes of full-speed mobile data for $35 a month. Unlimited wireless data at home for $50. Residential wireless internet offers that were inconceivable a few years ago, both in terms of data volume and price, will appear in Canada in 2023.
What’s happening in Canadian skies? The result of investments for 5G and a strategy to increase supply without reducing prices, experts respond.
As early as 2019, La Presse noted at the time, one of the major telecommunications providers in South Korea, KT, had taken advantage of the higher speeds promised by 5G to offer its customers a new service: high-speed wireless internet. at home. In the United States, two providers in particular, Verizon and T-Mobile, have been offering this product with unlimited wireless data for several years, which to date has some seven million subscribers.
In Canada, this concept practically did not exist, at least not with competitive conditions, until last summer. There have been mobile data plans with modems using the cellular network for residential internet for a long time. But as an example, 10 GB of data costs $110, or 50 GB for $150 per month for these “mobile internet plans”, depending on what is displayed on the Bell site.
Rogers opened hostilities with rather spectacular discounts on its “5G residential service”. This wireless internet, for example, currently offers download speeds of up to 25 Mb/s for the first 500 gigabytes, with speeds subsequently reduced to 10 Mb/s, for $35 under certain conditions.
It should be noted that prices are lower in Quebec, by almost 13%, than in Ontario.
Bell currently has a similar offering called “Wireless Home Internet 25”, targeting rural areas, for $50 per month with a maximum speed of 25 Mbps up to 450 gigabytes, and reduced to 10 Mbps thereafter. .
The big news, in fact, is the volume of mobile data offered at reasonable prices. This deflation has been observed since 2022 among virtually all providers, notes PlanHub.ca, a telecommunications package comparison site. Price reductions per gigabyte range from 95% for Rogers to 31% for Videotron.
How can we explain this sudden generosity in mobile data? Through investments in networks and the allocation of new frequencies, responds Eric Smith, senior vice-president at the Canadian Telecommunications Association, which represents most of the major providers.
It is still too early to see the impact of the recent 2023 auctions in the spectrum specifically offered for 5G, that of 3.8 GHz. Previous auctions, in the 3.5 GHz bands in 2021 and 600 MHz in 2019, would, however, begin to bear fruit. The latter two spectra constitute a “sweet spot” since they combine range with increased data transport capacity, Smith says.
“As providers deploy antennas and telecommunications team for 5G implementation, they can handle more connections and increase network capacity. All this improves the quality of service,” he says.
An attentive observer of the telecommunications industry, Pierre Larouche recalls that 5G was quickly presented as an interesting alternative to wired networks. The professor of competition law at the University of Montreal believes that for Rogers, this is an attractive solution to overcome one of its weaknesses in Quebec, the distribution of signals to users’ homes.
“Rogers can compete with Videotron and Bell down to the cell tower, they have comparable architecture. Their challenge is to have a connection all the way home. »
As for the falling cost of mobile data, he warns that his explanation is “a bit cynical”. He notes that competition in Canada is essentially on three levels. The first: network quality. The second: the volume of data, which has experienced an upheaval in recent months. These two strategies do not cost suppliers much, he believes.
“On the quality of the network, we sell figures. For the volume of data, it doesn’t cost too much to give 50 GB instead of 5 GB […] The network is there, it is paid for, it has the capacity. For businesses, it’s a way of competing that is manageable. »
These first two areas of competition, he analyzes, mainly serve to avoid the third, much more painful for companies: price wars. Which could be inevitable if the norm becomes, as with wired residential internet, to offer unlimited data.
“After that, all that’s left is price competition, and that’s what they absolutely want to avoid. We try parameters that do not cost too much, the quality of the network, the quantity of data, but we will reach the limit. If the market works well, prices will fall. »
