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Big telecom = better wireless service in Canada, says Navigant study


September 13, 2013
By Anthony Capkun

September 13, 2013 – Canada’s wireless market outperforms those in Europe in higher levels of investment, innovation and customer usage, says a new study from Navigant Economics, but Canadian regulators are changing some of the policies that have been responsible our success as we move to adopt policies similar to those in Europe.

“Canadian regulators appear to be moving in the direction of adopting the sorts of policies that have led to market fragmentation and stalled investment and innovation in Europe,” said Jeff Eisenach, managing director of Navigant’s Economics practice and a co-author of the report. “As the report concludes, policies designed to ‘promote competition’ by artificially increasing the number of competitors have been shown to fail in Europe and should be avoided in North America.”

According to the report, North American mobile wireless consumers use their devices for both voice and data services far more intensely than those in Europe. These consumers also enjoy a faster, more capable wireless network. Other findings from the report include:

• North Americans use two to five times more voice time and twice as much data than Europeans.
• Canadian wireless carriers invest 2.3 times those in Europe, per connection, in infrastructure.
• North American wireless speeds are 75% faster than the European average—a gap that is expected to grow.
• While North American and European consumers are equally likely to own smartphones, North American consumers are more likely to use their phones for web-related activities, such as mobile banking, watching video on their phones and browsing the web.

“Consumers in North America increasingly benefit from more advanced networks than those in Europe and, as a result, consume more services,” said Eisenach. “This leads to additional revenue generation necessary to support ongoing investments. It’s a continuing cycle resulting in a constant stream of benefits recognized by consumers. In contrast, European countries have adopted policies trying to force more competitors into a market, which has resulted in companies that are too fragmented to invest in new infrastructure, causing a problematic cycle of declining network capacity and quality.”

The study was authored by Erik Bohlin, Kevin W. Caves and Jeff Eisenach, and sponsored by Telus.