Is the telecommunications industry ready to change?

By : Dominique Lamy

Only 48 percent of Canadians state that they trust telecommunications companies, according to an industry trust barometer study created by Option consommateurs. To reverse the trend, the industry’s very foundations need to be called into question. Here we’ll present a few possible answers.

According to the most recent survey by Leger for Option consommateurs, a certain level of dissatisfaction with several business sectors on the part of customers has been brought to light.

Retail (60%), travel (58%), banks and financial institutions (58%), and insurance (55%) have emerged fairly well from the survey. Study participants consider these sectors to be the most worthy of their trust. Which is certainly cause for celebration!

The food, automotive, real estate, and telecommunications industries achieved lower trust scores: 54%, 51%, 51%, and 48% respectively. However, the satisfaction rate for telecommunications services is relatively high, being 84% for mobile, 79% for Internet providers, and 78% for television, and are significantly higher in Quebec specifically, where satisfaction rates are 89%, 84%, and 84% respectively.

What’s going wrong in the telecommunications industry?

Customers have a number of grievances with the industry. Among them, the higher cost of services remains the main source of dissatisfaction when it comes to mobile (63%), the Internet (53%), and television (63%).

Alexandre Plourde, a lawyer and analyst for Option consommateurs, has noticed this dissatisfaction for quite some time.

“Several studies show that Canadians bear the brunt of higher costs for these services compared to rates in other countries. The many complaints made regarding disclosure and inconsistent contracts in recent years certainly don’t help create a relationship based on trust.”

And in cases where customers are tempted to switch to another service provider, they find there is limited selection within the country. Which means the grass isn’t necessarily greener on the other side!

Here are three changes that could shake things up and enable the telecommunications industry to start afresh on better foundations.

Increase competition within the industry

To benefit from better pricing, ensure quality customer service, and offer a wider variety of choice to consumers, the number of operators within the industry must be increased. “Stronger competition would be one solution to gaining consumer trust in the industry,” confirms Plourde.

A new player would be able to adopt an aggressive pricing strategy to succeed in penetrating a new market. “And to avoid losing customers, the big national players would have to change their prices as a result,” says Plourde. There are a number of solutions that could be implemented to promote the emergence of healthy competition.

For example, the advent of a Crown corporation as an additional industry player or the arrival of a foreign competitor within Canadian territory are two options that are regularly discussed. However, our regulatory framework is not open to these possibilities and foreign investment is banned in this sector in Canada.

Promote the sharing of infrastructure

In April 2021, after a lengthy examination of the Canadian wireless industry, the Canadian Radio-television and Telecommunications Commission (CRTC) ruled that BCE, Telus, Rogers Communications, and SaskTel were obliged to sell access to their wireless networks to regional competitors, who in turn must commit to building their own networks within seven years following the sale. The goal of this decision was to improve competition.

One year later, in April 2022, a decision was made regarding Data On Tap’s CRTC petition, which asked for obligatory access to national networks for companies who didn’t already have their own networks or spectrum licences. The request was rejected, the government deciding that such a change would negatively affect small regional providers who had already invested substantial amounts on their own.

So national wireless networks remain closed to competitors who don’t already own their own infrastructure. These providers, known within the industry as mobile virtual network operators (MVNO), would have otherwise been able to increase competition and reduce the costs borne by consumers.

Facilitate dialogue

When trust issues undermine the relationship between two parties, communication is sometimes the solution. In such situations, every opportunity to communicate with a customer should be seen as an opportunity for greater transparency.

“Bills would benefit from being easier to read and to understand,” states Plourde. Such sentiments are echoed in the Option consommateurs trust barometer study: Only 41 percent of respondents stated that their contract with telecommunications companies was sufficiently clear.

It’s somewhat ironic to note that big telecommunications companies seem to have a hard time . . . well, communicating clearly. While consumers continue to bear the brunt of the cost, possible solutions are within easy reach.