Few things anger Canadians as much as the cost of telecommunications services. But in fact, subscribers themselves are to blame for the fact that Internet prices are constantly rising. Editor Aaron Saltzman of the CBC explains why.
“The price is not elastic because consumers are not looking for alternatives,” says Professor Brynn Weingard, who teaches neuroscience and consumer behavior psychology at York University’s Schulich School of Business in Toronto, “So providers can set any price.”
In 2018, two major telecommunications providers — Bell and Rogers — raised the price of the Internet several times. Users were very unhappy with the rise in price, but statistics show that few people switched to a cheaper provider.
However, cheaper internet options exist. Resellers entered the market in 2010 when the Canadian Radio and Television Commission (CRTC) allowed third parties to resell traffic.
There are more than 550 high-speed Internet resellers in Canada. These are small companies that rent network access from large providers at wholesale prices, and then offer their own packages of services to consumers. Each reseller in each city is different. For example, in Vancouver, you can apply for services from TekSavvy, Vmedia or Internet Lightspeed.
On average, the Internet tariffs of such small companies are much cheaper than those of large providers.
According to a report by the consulting company Nordicity, resellers have tariff plans with Internet speeds from 16 to 40 megabits per second (Mbps) on average 24.52% cheaper than large providers. For other speeds, the difference was even greater, except for tariff plans with the lowest (20.32%) and the highest (17.91%) speed.
But, while resellers make up almost 70% of Internet providers in Canada, they receive only 4% of revenue.
Bell, Rogers, Telus and other large companies still serve 87% of subscribers in the country.
That is, despite the opportunity to switch to a cheaper alternative, Canadians continue to use the services of large suppliers. The reason lies in the psychology of Canadian consumers.
