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CWTA Study: Canadians Willing to Pay More for Cellular Services

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According to a study set to be released this morning by telecom consultant firm Nordicity and the Canadian Wireless Telecommunications Association (CWTA), Canadians are so in love with smartphones they are actually paying more than the price advertised by mobile carriers.

The study, titled “The Benefit of the Wireless Telecommunications Industry to the Canadian Economy,” is set to be announced at the Canadian Telecom Summit Monday by Bernard Lord, CWTA president, notes The Globe and Mail.

…the study calculates a concept called the “consumer surplus” which is the difference between the dollar value a consumer ascribes to a service and its going market rate.

The study is based on 2011 data where at the time, most Canadians were still using regular cellphones. But from December 2011 to 2012, smartphone penetration rates increased from 45% to 65% respectively. One wireless incumbent had a smartphone adoption rate of 70% in the first quarter of 2013. At last year’s summit, the CWTA released a study noting smartphone adoption had reach rates of 70% by consumers aged 18-34.

Lord went on to say “It is a voluntary choice that Canadian consumers make,” when it comes to buying smartphones, as Canada is ranked the third-highest smartphone adoption rate out of G8 nations, due in part to “competitive pricing” of devices and networks.

When questioned about the idea of a consumer surplus and how it is consistent with complains about wireless pricing, Lord noted overall prices for voice, text and data have declined despite the increase of usage:

“When I hear these groups, the detractors and the professional complainers, sometimes out there saying: ‘Oh, this is bad, and things are awful,’ somehow they are suggesting that maybe Canadians don’t know what they are doing,” he said. “Canadians are buying the most sophisticated devices … and that’s because they see the value of it.”

Not everyone agrees with the opinions of the CWTA, as recently OpenMedia.ca executive director Steve Anderson said:

“With independent providers unable to gain a foothold in this country and offer real choice, the Big Three are able to raise prices at will and to trap Canadians in restrictive contracts with poor service,”

“This has been going on for too long, it’s getting worse, and it’s preventing our digital economy from thriving.”

After months of deliberating what should be included, the CRTC is set to release its wireless code today just as the Summit is set to take place. Stay tuned folks!

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