To know the basics of mobile phone services in Canada, you need to know that in Canada we have 3 Big telecom companies that own 90% of the market: Rogers, Telus and Bell. 

Canadians in most provinces had access to two or three facilities-based networks. Over 99% of Canadians have access to LTE networks, but this availability varies by location.

One question people ask a lot is: Why is mobile phone service in Canada so expensive compared to other countries?
Statistics show that Canadians spend 15% to 40% more for data than Americans, spending an average of $50 per month for 2 GB, while Americans spend $40 for the same amount.

Now, let’s look at some specific factors that influence plan costs in Canada:

– Low Population Density

Because Canada is such a large country with a low population density—one of the lowest in the world, with four people per kilometer—consumers with cell phone plans are being forced to pay higher prices for coverage to compensate for this sparsity.

– Large Investments

Since 1987, major telecom companies in Canada have poured $70 billion into infrastructure, innovation, spectrum acquisition, and licensing fees. This staggering amount partly accounts for Canada’s expensive cell phone plans.

– Top performance

Another common response from the Big 3 is that Canada’s networks provide some of the best coverage and speeds in the world. Speeds in Canada do compare very favorably with speeds in other OECD countries. 2 of the 3 nationwide networks run on 4G-LTE exclusively and reach 99% of Canada’s population.

– High Barrier To Entry

Speaking of new carriers, the bar has been set for market entry, and it’s a high one.  

Large LTE networks in Canada account for 20% to 30% of the country’s geographic area, and about 94% of Canadians use these networks. To compete with these statistics, a new carrier would need massive funds to join the game. Building new towers, investing in hardware, and installing new antennas would require great expense. Moreover, a new company would lose even more by charging competitive prices to compete with established networks.

– Limited competition

Another potential factor driving cell phone plan costs is limited competition in Canada, so carriers don’t have to lower their prices. Rogers is the biggest carrier in Canada, followed by Bell and Telus. The studies suggest that it is the lack of competition that drives Canadian retail prices to be among the highest in the world, among the other factors already mentioned.

Although it may not seem like it, people in Canada also have the option to shop around for better plans from other carriers. One such option includes using an MVNO.

What is an MVNO? 

MVNO stands for Mobile Virtual Network Operator. These companies, like PhoneBox, have their own sales and customer support divisions, but they purchase service from bigger providers at wholesale to then sell to consumers. PhoneBox uses Rogers and Telus.

What are the advantages of being an MVNO?

– We increase pressure on major providers by offering more affordable prices,

– We provide an incentive for innovation,

– We improve customer service across the board to keep up with the competition, and

– We provide an alternative for consumers who can’t afford the Big Three’s Plan

If you were asking yourself how PhoneBox can offer such good plan prices with such a good speed, this is your answer.