Wednesday, July 28, 2010

Our Telecommunications Industry is Hurting Us

To be clear: I am not a huge fan of the Canadian wireless industry.  Our service providers treat customers poorly, knowing that we aren't going to get better service elsewhere.  When it comes to price, we pay high prices and there isn't much difference between carriers.

Recently, I starting thinking about how our high prices and terrible service was going to affect our ability to compete in the global wireless industry.  Specifically, I was wondering how this would affect our ability to innovate in the space of mobile applications.

Then I read this interesting article from the CBC about a recent wireless industry study.  Some of the highlights are:

-Our earnings percentage at 46.7% was the highest of 21 developed nations studied.  Average was 38.3.

-Our carriers have the highest average revenue per user in the study (ARPU) at $54.73.   Average ARPU for developed nations was $42.90.

-Canada was last among developed nations in wireless penetration.

-Data represented only 23.9% of the monthly bill versus average in developed world of 31.8%.  You might think this means we have lower rates but the study also found that while carriers have lower per minute revenues, they have higher charges for additional features, which includes data, and this is what contributed to our higher ARPU.

-We posted the third highest minutes of use, but that seems to be because we are one of only a few countries that still charges for incoming calls.

Reviewing this information, I can't help but wonder if we could say that cost is a big reason more Canadian's don't have wireless phones.  There doesn't appear to be any data in the study on this but I don't think it would be a stretch.  I also wonder if high prices are keeping our data usage to a minimum.

I worry about what the effect of all of this will be on Canada's wireless industry.  We used to be highly regarded in the wireless infrastructure business but as the gap between us and the rest of the world in terms of usage increases, I would suggest that it will not help us lead the way in innovation.

More importantly, I wonder about how this will affect our ability to innovate on the application level.  If mobile isn't part of our populations DNA, as it might be in places like Japan, then how can we be expected to lead the way in application development going forward?  If our own citizens aren't consuming mobile data as part of their daily routines, then how are we to grow our industries related to data?

I supposed that one could argue that it doesn't matter where an application is developed because as long as it gets onto devices in the language required, it doesn't matter where it was developed.  But I still can't help but feel that we are increasingly being left behind as the rest of the world charges into the wireless future.

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