Canadians getting short end of the stick

Canada's old telecom infrastructure

The telecommunications industry in Canada is among the most hated by Canadian consumers. This includes land line phone networks, internet, cable television and cell phone networks. The three big players in this space are: Rogers, Bell and Telus (Shaw exists, but mostly out west). These companies suffer from a serious bout of ‘comfy chair syndrome’ where they have it better than they can possibly imagine and they do not want to actually compete against each other because that would hurt themselves as well.

These companies charge insanely high prices for these crucial services and deliver mediocre at best, results. The main problem here is a serious lack of competition. Thankfully, the federal government recently said that they plan to change that for this industry. The current laws stipulate that in order to compete in this industry, the company must be Canadian owned. Since the entry costs for this industry are extremely high, for a country with a population similar to the state of California, three large companies are about the most that can be generated.

However, if foreign companies are allowed to enter this market and be allowed to truly compete, Canadians will see much better and more up to date technologies at reasonable prices and maybe even an acceptable level of customer service. I recently read that in France you can have a faster internet connection than Canadians currently get, plus HD cable TV and a nearly unlimited telephone plan including long distance for about $40. In Canada, this would cost well over $200 (I know, I am one of those suckers). On top of that, even for this high price, the product would not be as good as the lucky person in France’s product. Even for those who are skilled negotiators, it is still not going to come close to the results that can easily be purchased in France and likely many other countries as well.

The ‘big three’ companies in Canada have been so content with the situation that they let Canada’s technological competitiveness with its internet infrastructure sink all the way to the bottom of the barrel. In terms of the cost to Canadians for these crappy speeds, Canada ranks 28th out of the 30 top economies, just ahead of two emerging markets: Mexico and Poland. That should make every Canadian sick and encourage them let the government know that they are tired of being squeezed for every penny they earn.

Hopefully in the near future, foreign companies will be allowed to enter this market and put serious pressure on the ‘big three’ which may force them to actually compete or risk going out of business. I have said for a long time now that Rogers has been very successful in business not because they provide good products and services and an understanding of their customers, but rather a really good understanding of the government regulations. They have mastered how to utilize these regulations to the utmost advantage to them and it allowed them to become one of Canada’s largest companies, even though none of their customers actually like them.