Comparative Analysis of International Mobile Wireless Roaming Rates of Canadian Wireless Service Providers and International Counterparts

October 7, 2024

Report submitted by:

│ Networks, Economics & Strategy Inc. (“NE&S”)

In partnership with

T3i Group LLC dba Tarifica (“Tarifica”)

Authored by:
Dr. Tanveer Ahmed CPA, CMA
Francois Picard P. Eng.

Networks, Economics & Strategy (NE&S) Inc.
123 Slater Street, Suite 903
Ottawa, ON, Canada

© His Majesty the King in Right of Canada, as represented by the Canadian Radio-television and Telecommunications Commission, 2024

ISBN: 978-0-660-72763-9
Cat. No.: BC92-134/2024E-PDF

Table of Contents

• Executive Summary
• 1 Study Objectives
  • 1.1 Introduction
  • 1.2 Study Mandate and Approach
  • 1.3 Study Limitations
• 2 IMR Market Structure and Regulations
  • 2.1 Comparative Market Structure
  • 2.2 Comparative Regulatory Approaches
  • 2.3 International Roaming Arrangements
  • 2.4 Shifts in Regulations
• 3 IMR Service Categories
  • 3.1 IMR Pay-per-Use
  • 3.2 IMR Fixed Rate Plan
  • 3.3 IMR Bundled Plans
• 4 Data Collection Approach
  • 4.1 IMR Data
  • 4.2 Socio-economic Factors Data
• 5 IMR Comparison Methodology
  • 5.1 Offered IMR Rate Comparison
  • 5.2 Equalized IMR Rate Comparison
  • 5.3 Relative Price Under Similar Socio-Economic Conditions
• 6 IMR Comparative Rates Summary
  • 6.1 IMR-PPU Rates (per voice call minute)
  • 6.2 IMR-PPU Rates (per text message)
  • 6.3 IMR-PPU Rates (per MB of data)
  • 6.4 IMR Fixed Rate Plan
  • 6.5 IMR Bundled Plan
• 7 Analysis
  • 7.1 IMR-PPU Rate
  • 7.2 IMR Fixed Rate Plans
    • 7.2.1 Japan – Comparative IMR Fixed Rate Plan Scenarios
    • 7.2.2 Australia – Comparative IMR Fixed Rate Analysis
    • 7.2.3 France – Comparative IMR Fixed Rate Analysis
    • 7.2.4 Germany – Comparative IMR Fixed Rate Analysis
    • 7.2.5 Italy – Comparative IMR Fixed Rate Analysis
    • 7.2.6 Japan – Comparative IMR Fixed Rate Analysis
    • 7.2.7 Mexico – Comparative IMR Fixed Rate Analysis
    • 7.2.8 United Kingdom – Comparative IMR Fixed Rate Analysis
    • 7.2.9 United States – Comparative IMR Fixed Rate Analysis
  • 7.3 IMR Bundled Plan
  • 7.4 Other Considerations
• 8 Conclusion
• Appendices
  • Appendix A: Herfindahl-Hirschman Index (HHI)
  • Appendix B: IMR Comparative Rates
    • Appendix B-1: IMR-PPU (per minute)
    • Appendix B-2: IMR-PPU (per SMS)
    • Appendix B-3: IMR-PPU (per MB)
    • Appendix B-4: IMR Fixed Rate Plan
    • Appendix B-5: IMR Bundled
  • Appendix C: IMR Fixed Rate Profile Analysis
    • Appendix C-1: Scenario-I: [232 MB | Day1-7 days | To Japan] at Average IMR Rates
    • Appendix C-2: Scenario-II: [232 MB | Day7-28 days | To Japan] at Average IMR Rates
    • Appendix C-3: Scenario-III: [232 MB | Day1-7 days | To Japan] at Minimum IMR Rates
    • Appendix C-4: Scenario-IV: [232 MB | Day7-28 days | To Japan] at Minimum IMR Rates
  • Appendix D: IMR Fixed Rate Comparative Analysis [28-Day| Usage Scenario: 232 MB per day| Average Offered Rate Basis]
    • Appendix D-1: Australia [28-Day | Usage232 MB per day | Average Rate]
    • Appendix D-2: Canada [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-3: France [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-4: Germany [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-5: Italy [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-6: Japan [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-7: Mexico [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-8: United Kingdom [28-Day | Usage 232 MB per day | Average Rate]
    • Appendix D-9: United States [28-Day | Usage 232 MB per day | Average Rate]
  • Appendix E: IMR Fixed Rate Comparative Analysis [28-Day | Usage Scenario: 232 MB per day | Minimum Offered Rate Basis]
    • Appendix E-1: Australia [28-Day | Usage232 MB per day | Minimum Rate]
    • Appendix E-2: Canada [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-3: France [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-4: Germany [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-5: Italy [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-6: Japan [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-7: Mexico [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-8: United Kingdom [28-Day | Usage 232 MB per day | Minimum Rate]
    • Appendix E-9: United States [28-Day | Usage 232 MB per day | Minimum Rate]
  • Appendix F: IMR Rate Offers by Country (Detailed)
    • Appendix F-1: Australia
    • Appendix F-2: Canada
    • Appendix F-3: France
    • Appendix F-4: Germany
    • Appendix F-5: Italy
    • Appendix F-6: Japan
    • Appendix F-7: Mexico
    • Appendix F-8: United Kingdom
    • Appendix F-9: United States
  • Appendix G: IMR Rate Equalization Based on Socioeconomic Factors

List of Figures

• Figure 1: Average Data (MB per Day) Usage by Country
• Figure 2: Relative price under the same socio-economic conditions
• Figure 3: Annual Inward Tourist Arrivals (Average 2011-2020)
• Figure 4: IMR-PPU Comparative Rate Scenario
• Figure 5: IMR Fixed Plan Comparison – Average Canadian Rates vs. Average International Jurisdictions
• Figure 6: Canadian IMR Comparison - [IMR Fixed + Domestic] Plan vs. IMR Bundled

List of Tables

• Table 1: Price Equalization Socio-economic Factors
• Table 2: Australia - IMR Fixed Rate Plan Comparative Analysis
• Table 3: France - IMR Fixed Rate Plan Comparative Analysis
• Table 4: Germany - IMR Fixed Rate Plan Comparative Analysis
• Table 5: Italy - IMR Fixed Rate Plan Comparative Analysis
• Table 6: Mexico - IMR Fixed Rate Plan Comparative Analysis
• Table 7: United Kingdom - IMR Fixed Rate Plan Comparative Analysis
• Table 8: United States - IMR Fixed Rate Plan Comparative Analysis

Executive Summary

This study, commissioned by the Canadian Radio-television and Telecommunications Commission (CRTC), presents the comparative analysis of the international mobile wireless roaming (IMR) rates of Canadian wireless service providers (WSPs) and eight international counterparts (Australia, France, Germany, Italy, Japan, Mexico, the United Kingdom, and the United States). Networks, Economics & Strategy Inc. (NE&S), in partnership with T3i Group LLC dba Tarifica (Tarifica), conducted the study and prepared this report.

The study involved collecting and analyzing IMR data such as the rates and usage for voice (call) minutes, text messages, and megabytes (MB) of data, taking into consideration market share.

Three IMR rate categories were considered in the comparative analysis: IMR pay-per-use (IMR-PPU), IMR fixed rate plans and IMR bundled plans

• WSPs typically charge IMR-PPU rates when subscribers use their provider’s domestic mobile service (voice calls, text messages, and data usage) in another country without an international roaming plan.
• IMR fixed rate plans represent fixed rates charged by WSPs to their subscribers for using their international mobile service in other countries.
• IMR bundled rates represent domestic monthly plans, including international roaming for selected countries.

The key findings of the study include:

• Compared to IMR fixed rates and IMR bundled rates, IMR-PPU rates are very high across the countries studied. As members of the European Union (EU), France, Germany, Italy, and the United Kingdom^{footnote 1}, benefit from legislation of roaming charges within the EU. As a result, their citizens do not have to pay any additional charges to use their mobile phone when travelling within the EU.
• WSPs offer IMR bundled services for a limited number of countries, based on demand and the needs of subscribers.
  For example, Canadian WSPs offer IMR bundled options for the comparator countries, except for Japan and Australia. Canadian IMR bundled rates are higher than those of the other countries studied, with two exceptions: the IMR bundled rates offered by French and Mexican WSPs to roam in Canada are higher than those offered by Canadian WSPs for roaming in France and Mexico.
• While travellers prefer IMR fixed plans, the IMR fixed rate plans offered by Canadian WSPs are limited to fixed daily rate plans: "Roam Better" (Bell), "Roam Like Home" (Rogers), "Easy Roam" (TELUS), and "Traveller Pass" (Videotron). Whereas the WSPs of the comparator countries offer a variety of IMR fixed rate options, including:
  1. roam with a domestic plan for an additional daily fee;
  2. roam with a specified usage (voice call minutes, number of text messages, and MB of data) for a specified number of days at a fixed price; and,
  3. same as b) for data only, voice only, text only, or different combinations of the three services.

Such flexible rate options allow the subscribers of international WSPs to select plans according to their needs, based on usage and duration of travel, which effectively results in lower IMR fees.

• Canadians do not have access to such flexible IMR fixed rate options, which makes it more expensive to use their mobile phone while travelling internationally, depending on their usage and duration of travel, compared to the citizens of comparator countries.
• The Canadian IMR fixed rates are generally among the highest for usage exceeding three days. For countries such as Australia, Japan, and the United States, Canadian IMR rates rank among the middle range for usage up to three days.

The study also identified factors that may explain the differences between IMR rates that Canadian WSPs charge their subscribers and those charged by WSPs providing mobile wireless services in the comparator countries listed above. To that end, the IMR rates as offered were equalised to reflect the equivalent (Canadian) socio-economic conditions across the eight comparator countries.

• The socio-economic factors used for the comparison of equalized IMR rates included: the market size of domestic mobile services, the cost base of mobile services, consumer affordability,^{footnote 2} IMR demand factors, and the level of competition (market concentration) in the mobile services sector.
• Given data and time limitations, this equalized IMR rate comparison is relatively simplistic, and could be improved using more extensive econometric modelling. Nevertheless, the comparison presented in this study, if interpreted with caution, provides a reasonable basis for policy analysis.
• In general, the price of IMR offers in the comparator countries (except for Australia, and Mexico) are higher than Canada’s under conditions represented by the socio-economic factors stated above. Since a linear relationship has been assumed between the socio-economic factors and the country’s price level, any conclusion based on this finding should be made with appropriate caution.
• The two main factors driving IMR rate differences are cost and inward tourism. We note that if the cost factor is fully excluded, then based on the equalization of other socio-economic factors, the Canadian prices would be higher than those of comparator countries. Further, if the inward tourism factor is excluded, then based on the equalization of other socio-economic factors, including the cost factor, Canadian prices would remain lower than those of comparator countries.

1 Study Objectives

1.1 Introduction

This study, commissioned by the Canadian Radio-television and Telecommunications Commission (“CRTC”) has been prepared by Networks, Economics & Strategy Inc. (“NE&S”), in partnership with T3i Group LLC dba Tarifica (“Tarifica”).

The study aims to provide an objective comparative analysis of international mobile roaming (IMR) rates charged by Canadian wireless service providers (WSPs) to their subscribers compared to those charged by WSPs in eight (8) peer countries, including Australia, France, Germany, Italy, Japan, Mexico, the United Kingdom, and the United States.

1.2 Study Mandate and Approach

The main objective of the study is to provide a comparative analysis of the differences in IMR rates across the nine (9) countries studied, including Canada. To that end, the main tasks included:

• collect IMR data on rates and usage (voice minutes, text messages, data use (MB-megabytes), the market share of providers);
• identify the factors (e.g., regulatory, economic, geopolitical, structural and/or technical) that may explain the differences between IMR rates charged by Canadian WSPs to their subscribers and those charged by WSPs providing mobile wireless services in the comparator countries, and collect related data; and,
• complete the comparative analysis: first compare IMR rates as offered, then compare the IMR rates adjusted for socio-economic and telecommunications factors (explained in Sections 4.2 and 5).

1.3 Study Limitations

Telecommunications factors can impact the IMR rates charged by WSPs to their subscribers. These factors include the termination rates charged by WSPs who partner to provide IMR services (e.g., CPP-Calling Party Pays/Subscriber Pays, RPP-Receiving Party/Subscriber Pays,) and wholesale IMR rates. However, termination rates (typically based on WSPs network cost) and wholesale IMR rates (typically negotiated in commercial agreements between WSPs of different countries) are not publicly available. Including these factors in the comparative analysis would have required access to similar WSP data from the comparator countries, which was not possible. Moreover, due to the confidential nature of this data, aggregation by country would have been required and involved a complex process, given the varying size of WSPs and traffic volumes, among other variables. Therefore, socioeconomic factors representing relative cost structure, consumers’ affordability, IMR demand, and competition in the wireless sector were used. The IMR rate comparison presented in this study, if interpreted with caution, provides a reasonable basis for policy analysis.

2 IMR Market Structure and Regulations

This section outlines the IMR market structure and regulatory approaches applied across the countries studied.

2.1 Comparative Market Structure

The IMR wholesale rates set by the WSPs of different countries are largely unregulated and rely on commercial agreements between service providers.

One notable exception applies to the members of the European Economic Area^{footnote 3} (EEA), which fall under the EU Roaming Regulation^{footnote 4}. This regulation stipulates that end-users from member states cannot be charged roaming fees for roaming to another member state. The regulation also provides tariffed rates for the wholesale provision of roaming services by a member state WSP to another member state WSP. The first EU Roaming Regulation abolished roaming charges in 2017. The initial regulation was replaced by the current regulation in 2022 which extends the requirement until 2032. The current regulation sets the rates that a WSP can charge on a wholesale basis to another member-state WSP for voice calls, text messages, and data usage. The EU Roaming Regulation also sets a timeline to decrease these rates. As of 1 January 2024, the rates that can be charged are EUR 0.022 ($0.033) per minute for voice calls, to be decreased to EUR 0.019 ($0.028) per minute from 2025 to 2032; EUR 0.004 ($0.0059) per text message, to be decreased to EUR 0.003 ($0.0044) per text message from 2025 to 2032; and EUR 1.55 ($2.30) per GB of data, to be decreased to EUR 1.30 ($1.93) per GB in 2025, to EUR 1.10 ($1.63) per GB in 2026 and to EUR 1.00 ($1.48) per GB from 2027 to 2032.

While these tariffed rates are not available to WSPs outside the EEA, they provide insight into the actual cost to WSPs to provide wholesale roaming to the WSPs of other countries. This assumes that it will not cost a WSP more to provide wholesale roaming to a provider of a member state than it would to provide service to a provider of a non-member state.

The Iceland, Lichtenstein, Norway and United Kingdom Trade Agreement places caps on wholesale rates between WSPs operating in those countries. The agreement stipulates that outgoing voice calls will be charged at EUR 0.032 ($0.047) per minute, incoming text messages will be free, outgoing text messages will be charged at EUR 0.01 ($0.014) per message, and data will be charged at EUR 2.50 ($3.69) per GB.

There are also a number of trade agreements that provide non-binding or aspirational commitments related to IMR. Canadian examples include Article 18.25 of the Canada-United States-Mexico Agreement (CUSMA), in which parties “endeavor to cooperate on promoting transparent and reasonable rates for international mobile roaming services”, and Article 13.6 of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership^{footnote 5} (CPTPP), which contains a similar statement. Neither of these agreements imposes binding rates on any of its members.

2.2 Comparative Regulatory Approaches

Regulatory approaches to IMR in other countries, apart from the EU Roaming Regulation discussed above, consist largely of consumer protection measures that are applied to WSPs when their subscribers are roaming in other countries. Other countries have implemented consumer protections like Canada’s The Wireless Code to promote transparency and avoid bill shock when their citizens travel abroad.

In Australia, the Telecommunications Service Provider (International Mobile Roaming) Determination 2019 provides consumers with transparency and bill shock protection by imposing requirements on Australian WSPs to provide notification to subscribers—within ten minutes of the activation of IMR that the subscriber will be charged increased rates, what those rates are, and provide the subscriber the ability to deactivate IMR. WSPs are also obligated to make available without charge to subscribers, a spend management tool that informs subscribers when they have reached 50%, 85% and 100% of their value packs, and provide notification at each increment of AUD 100 ($91) of usage.

In Europe (France, Germany, and Italy for the purpose of this report), Articles 13 and 14 of the EU Roaming Regulation imposes requirements on European WSPs related to transparency and safeguards for retail subscribers when they incur charges for IMR. WSPs must send a notification free of charge to subscribers when they incur charges for IMR. Subscribers have a right to request and receive information from other countries to the charges they might incur for IMR. In terms of data usage, the WSPs must establish one or more spending limits, one of which must be EUR 50 ($74) excluding Value Added Tax (VAT). WSPs may instead establish data volume limits provided that one of the increments is worth close to but does not exceed EUR 50 ($74) excluding VAT. When a subscriber reaches 80% of an established limit, the WSP must provide notification that this threshold has been reached.

In Mexico, the Instituto Federal de Telecomunicaciones (IFT), which regulates telecommunications in Mexico encourages WSPs to be transparent with consumers but has not enacted binding regulations imposing obligations related to IMR. Although there are no specific rules for IMR, Mexico has adopted jointly between the IFT and la Procuraduría Federal del Consumidor (PROFECO), the consumer protection agency, a bill of telecommunications rights^{footnote 6} which stipulates, among others, that telecommunications providers must be transparent regarding charges that the consumer is subject to in their contract. WSPs must have their service contract templates registered by PROFECO.

In the United Kingdom, consumers had benefitted from protections offered by the EU Roaming Regulation. However, following the United Kingdom’s exit from the EU, the pricing protections of the EU Roaming Regulation fell away in January 2021, and the remainder of the protections fell away in July of 2022. Ofcom, the United Kingdom’s telecommunications regulator, published a new regulation in March 2024^{footnote 7} which will take effect in October 2024. Ofcom identified a need to enact regulations to restore some consumer protections related to IMR. For example, inadvertent IMR was noted as problematic for consumers especially in Northern Ireland, a part of the United Kingdom that shares a land border with EU member Ireland. WSPs will be required to notify subscribers when IMR is activated and to treat Ireland usage as United Kingdom usage if the subscriber is in the United Kingdom.

In the United States, the Federal Communications Commission (FCC) has taken a collaborative approach with the wireless industry to promote transparency to consumers rather than adopting binding regulation. The CTIA (originally the Cellular Telephone Industries Association) has adopted a voluntary code of conduct known as the Consumer Code for Wireless Services. This code stipulates that WSPs will provide, at no charge, notification to subscribers when they approach, exceed and will incur additional charges related to their regular usage. The code also stipulates that subscribers who do not have IMR plans or packages will receive notifications when IMR-PPU is activated, and they are responsible for IMR charges.

2.3 International Roaming Arrangements

As discussed above in Section 2.1, several countries have formal arrangements for wholesale IMR rates through trade treaties.

There are also informal arrangements that are driven by market forces and proximity. For example, mobile service plans that include IMR—such as those between Canada, Mexico and the United States—are offered by the major WSPs in these countries.

Several United Kingdom operators, following its exit from the EU in 2021, still include roaming at no extra charge in EU countries—even though the wholesale IMR obligations under the EU Roaming Regulation are no longer in effect between the EU and the United Kingdom. According to Ofcom^{footnote 8}, however, some operators have begun to charge subscribers for roaming in Europe.

2.4 Shifts in Regulations

For this study, we were asked to examine any shift in the regulatory environment in Canada and the eight international counterparts with respect to IMR in the last five years. As noted in Sections 2.1 and 2.2 above, regulations pertaining to wholesale roaming are focused on domestic roaming (Canada, Mexico), roaming between certain specific associated countries (France, Germany and Italy as EEA members), or wholesale roaming between subjects of specific international trade agreements (the United Kingdom with respect to Iceland, Liechtenstein, and Norway). All other regulations regarding IMR concern measures to protect consumers when they make use of IMR, to increase transparency and help prevent bill shock.

In the past five years, the EU Roaming Regulation was updated (in 2022). However, this update essentially extended and updated existing regulations that had been in place since 2017.

In the UK, Ofcom issued Mobile Roaming: Strengthening customer protection in March 2024. This regulatory policy appears to have been mainly motivated by issues that occurred for U.K. consumers when the consumer protections of the EU Roaming Regulation fell away in 2022 following the UK’s exit from the EU in 2020. However, it does not impose any novel requirements on service providers with regard to IMR rates charged to consumers, or on a wholesale basis between service providers.

In 2019, Australia adopted Telecommunications Service Provider (International Mobile Roaming) Determination 2019 which is analogous to Canada’s The Wireless Code and provides protections to consumers by imposing notification requirements and thresholds like those provided by Canadian or EU regulations.

Despite the apparent large gap between what consumers pay for IMR and the estimated cost of providing IMR service by service providers (see Section 7.4), and in spite of the apparent intentions at a high level by way of international trade agreements for countries to “endeavour to cooperate on promoting transparent and reasonable rates for international mobile roaming services”^{footnote 9} [emphasis added], there is no regulation of IMR rates paid by consumers, outside of EEA consumers using IMR in other EEA countries.

We therefore conclude that we have not noted a substantial shift in IMR regulations in the past five years.

3 IMR Service Categories

The IMR services were categorized into three main categories, as described below, to guide the comparative analysis.

3.1 IMR Pay-per-Use

WSPs typically charge IMR pay-per-use (IMR-PPU) rates when their subscribers use their domestic mobile service (voice calls, text messages, and data usage) in another country without an international roaming plan. Accordingly, IMR-PPU rates are charged based on per minute (for voice calls), per text (for text messages), and per MB (for data usage). IMR-PPU rates typically are the most expensive compared to the other two categories (fixed rate and bundled plans). Subscribers would pay IMR-PPU rates while visiting other countries where their home WSPs do not have daily fixed rate or IMR bundled offers, or when they have not opted to use these offerings.

3.2 IMR Fixed Rate Plan

IMR fixed rate plans represent fixed rates charged by WSPs to their subscribers for using their international mobile service in other countries. The rates are based on the international roaming service offer, which can range from a capped use (pre-specified or based on the subscriber’s domestic plan with a set amount of voice call minutes, text messages, and MBs for data usage) to unlimited use. As shown in the following sections, Canadian WSPs only offer their subscribers the use of their domestic plans in selected countries on a fixed daily charge—an approach known as “roam like home”. Whereas the comparator countries offer a wide range of plans, such as:

• fixed amount of voice calls and or text messages but no data use for a fixed price per day;
• fixed amount of data/MBs (with limited or unlimited voice minutes and text messages) for a fixed price for a fixed number of days, ranging from one day to up to 31 days; or,
• fixed or unlimited amount of MB (data only) for a fixed price for a fixed number of days, ranging from one day to up to 31 days.

Because of the wide range of variation in the fixed priced plans available among the countries studied, their comparison was based on data usage (GB). Given that Canadian WSPs offer one type^{footnote 10} of plan (fixed daily price) for subscribers to roam using their domestic plans, the comparison with the comparator countries was based on similar offers from their WSPs. In case similar (daily) offers were not offered by other countries’ WSPs, an equivalent offer (comparable to those offered by Canadian WSPs) was calculated using the average daily MB/data usage of Canadian subscribers.

3.3 IMR Bundled Plans

IMR bundled rates represent domestic monthly plans, including international roaming for selected countries. The comparative analysis of bundled rates was limited to countries for which the Canadian WSPs offer such plans and vice versa, i.e. where other countries’ WSPs offer similar plans to their subscribers, including Canada as one of the selected roaming countries.

4 Data Collection Approach

The two data sets collected for the two-step comparative analysis of rates (as offered and adjusted to socio-economic factors) are described below.

4.1 IMR Data

As noted above, there was marked variation among the IMR services offered by the WSPs across the countries studied. Therefore, to allow a consistent comparative analysis, the Tarifica team first developed MS Excel data templates for each of the three IMR service categories described above to collect rate data for IMR-PPU, IMR fixed rate plans, and IMR bundled plans.

This data was collected for all Mobile Network Operators (MNOs)^{footnote 11} in the nine countries studied, for all roaming destinations available (over 200 countries and regions), as outlined below.

• IMR-PPU Data Points:
  1. Date of data capture
  2. Price per minute for voice calls (incoming, outgoing, calling within the destination country, and calling home)
  3. Price per text (incoming and outgoing—normally the same price)
  4. Data roaming charges (per MB)
• IMR Fixed Rate Plan Data Points:
  1. Date of data capture
  2. Country or region for which add-on packages can be used
  3. Plan price and validity day (time range: effective start/end)
  4. Voice minutes, text messages, and data GBs offered for the plan price
• IMR Bundled Data Points:
  1. Relevant domestic plans (intended for use within the home country), including international roaming services by default
  2. Relevant domestic plans, including all elements noted above for IMR-PPU and IMR fixed rate plans, for national and international use

All rates and pricing information was collected and recorded in the respective country’s local currency. As rates change rapidly, the data collected was validated three times, at least seven days apart from the last capture, and the date of validation was also recorded.

4.2 Socio-economic Factors Data

It is argued that the prices charged by WSPs of different countries are affected by several factors, which the WSPs may or may not control. In this context, some experts maintain that a simple comparison based on similar service offerings or service baskets could be misleading. Therefore, a price comparison based on the effect of one variable on another, provided all other variables remain the same, suggests that IMR rate comparison is more appropriate for an objective policy analysis.

To address this dilemma, some experts have proposed a regression analysis to determine a country’s price ranking relative to their peers. This study proposes that such an approach requires a robust theoretical model (construct) and the availability of consistent panel data from large samples. A literature review led to the conclusion that a theoretical model to predict the price rank of telecommunications services in a country relative to its peers, has yet to be published. Moreover, due to rapid advancements in mobile network technologies (e.g., from 1G to 5G) over the past four decades and different paces of adoption in the countries studied, any available data will likely lack consistency in the way data is collected (or missing data), rendering it the least feasible for regression analysis.

As a result, the prices offered by WSPs in the countries studied were adjusted for the socio-economic factors in Table 1 below.

For the price-equalization factors in categories A to C above (proxy variables number 1 to 5), the latest available 10-year data^{footnote 12} was collected for each of the countries studied, using secondary sources that included the World Bank and Organisation for Economic Co-operation and Development (OECD)^{footnote 13} databases. Ten-year averages were calculated for the comparative analysis, as explained in the following section. For category D (proxy variable number 6) on competition, the HHI for each of the countries studied was calculated based on the market share of their respective WSPs, as provided by the Tarifica team (refer to Appendix A).

5 IMR Comparison Methodology

All the IMR rates presented in this study are in Canadian dollars ($). Accordingly, all the IMR rates offered by WSPs in the countries studied were captured in local currencies and converted into Canadian dollars using the OECD’s latest (2022) Purchasing Power Parity (PPP) conversion rate^{footnote 14}. Then the comparative analysis was undertaken, including:

• Step 1: Offered IMR Rate Comparison
• Step 2: Equalized IMR Rate Comparison

This two-step approach to the comparative analysis is outlined below.

5.1 Offered IMR Rate Comparison

This section outlines the approach used to complete Step 1 of the comparative analysis. The IMR rate comparison, in Canadian dollars based on the rates offered by WSPs of the countries studied, was completed for the three IMR service categories as described below.

5.1.1 IMR-PPU Pay-per-Use (per voice call minute, per text message, and per MB of data)

A rate was calculated for each of the countries studied, based on the minimum rate offered by each of their WSPs, which represented the weighted average of the rates offered by WSPs according to their respective market share.

5.1.2 IMR Fixed Rate Plan

The IMR fixed rate plans offered by the WSPs of the countries studied, include:

1. roam with a domestic plan for an additional daily fee;
2. roam with a specified usage (voice call minutes, number of text messages, and MB/data) for a specified number of days at a fixed price; and,
3. same as b) for data only, voice only, text only, or different combinations of these services.

It is noteworthy that around 90% of the approximate 18,500 offers observed include data-usage offers (fixed or unlimited GB) compared to less than roughly 2% that were text-only or voice-only offers. The comparative analysis for the IMR fixed rate plan service category was therefore based on data-usage offers to simplify comparisons. Canadian WSPs mainly offer an IMR daily fixed rate that subscribers pay to continue using their domestic plan while travelling abroad. The domestic plans offered by Canadian WSPs include a wide range of usage options, including varying quotas of GB/data usage to unlimited data usage per month. Compared to the offers by Canadian WSPs, the offers by the WSPs of the comparator countries include a variety of options based on a fixed GB/data quota over a specified number of days, ranging from one day to up to 31 days. Some offers, such as those by United States and Mexican WSPs, are more closely comparable to those of Canadian WSPs, whereas offers by the WSPs of other comparator countries were not comparable to those of Canadian WSPs. The latter were therefore recalculated, based on average daily data usage of 232 MB by Canadian subscribers—as described in the following example and Figure 1^{footnote 15}.

Example 1: Comparability of IMR fixed rate plans

• A United Kingdom WSP offers 1,000 MB/data for roaming over three days in Japan at a fixed rate of $60.
• A Canadian WSP typically offers around $15 per day to roam using a domestic plan, totaling $45 for three days in Japan.
• To accurately compare both offers, the United Kingdom WSP’s offer was recalculated based on the average usage of a Canadian mobile subscriber, i.e., 232 MB per day. Therefore, $60 (for 3 days) ÷ (1,000 MB ÷ 232 MB) = $60 ÷ 4.31 = $13.92 per day of the United Kingdom’s WSP offer—compared to $15 per day of the Canadian WSP offer.

Following the recalculations described above, the rates of individual WSPs were determined using an average of all relevant offers, as required. Because of the recalculations required to compare the offers by the WSPs of comparator countries to those of Canadian WSPs, average (instead of minimum) offers were used in the comparative analysis.

Finally, each country’s rate was calculated using the weighted average of its WSPs’ rates, according to their respective market share.

Figure 1: Average Data (MB per Day) Usage by Country

5.1.3 IMR Bundled Rate Plan

IMR bundled rate plans refers to domestic monthly plans, including international roaming for selected countries.

Canadian WSPs offer IMR bundled rate plans for all countries studied, except for Australia and Japan. WSPs in the United States and Mexico offer IMR bundled plans for North American countries. Few European countries offer similar plans for subscribers visiting Canada. The rate plans of European comparator countries were therefore recalculated based on data allowance, as described above in Example 1.

Following the recalculations noted above, where required, the rates of individual WSPs' were determined using the average of all related WSPs offers. The average (instead of minimum) offers were used due to the requirement to recalculate the offers by most WSPs of comparator countries, as they were not comparable to offers by Canadian WSPs.

Finally, each country’s rate was calculated using the weighted average of its WSPs’ rates, according to their respective market shares.

5.2 Equalized IMR Rate Comparison

This section outlines the approach to completing Step 2 of the comparative analysis. The comparative rates calculated in Step 1, for the countries studied, were adjusted to compare Canadian IMR rates with the IMR rates of comparator countries with similar socio-economic conditions. This step required the equalization of rates, based on the socio-economic factors in Table 1 above, as explained below.

The theoretical framework and the basis of socioeconomic factors used to equalize the comparator countries’ IMR rates for comparative analysis are detailed in Appendix G. Given data and time limitations, this equalized IMR rate comparison is relatively simplistic, and could be improved using more extensive econometric modelling. Nevertheless, the comparison presented in this study, if interpreted with caution, provides a reasonable basis for policy analysis.

IMR rate equalization was completed in the following steps.

5.2.1 Cost Structure

The cost of telecommunications services offered by WSPs of different countries vary because of country-specific factors, which impact the price of services that WSPs offer to their subscribers. Market size and the cost of inputs to deliver telecommunications services are the two key country-specific factors considered in this study.

It was essential therefore to equalize cross-country prices (similar market share and cost base) in order to understand any real price difference. Two proxy variables—mobile penetration rate and productivity (GDP per employee worked)—were used for this purpose, as described below in examples 2 and 3.

Example 2: Price equalization for a common market size

• Penetration rate: the number of mobile subscribers per 100 persons represents a WSP’s domestic market share.
• Market size in country A is 100 and 120 in country B.
• WSPs in both countries have a target total profit of $120.
• WSPs in country A will need to earn $1.20 ($120 ÷ 100) per subscriber to make the same profit as WSPs in country B earning $1.00 ($120 ÷ 120) per subscriber, i.e., WSPs in both countries earn the same (normal) profit if prices in country A are 20% higher than those in country B, provided that other WSP variables remain the same

Example 3: Price equalization for a common cost base

• Productivity (GDP per hour worked): represents value added per unit of cost input, i.e., firms operating in an economy with relatively higher productivity can earn the same profit by offering a proportionally lower price compared to firms operating in an economy with relatively lower productivity
• Country A‘s productivity is $100 and country B’s is $90 (10% lower), and both countries have a market size of 100 subscribers
• WSPs of both countries have a target total profit of $100, i.e., WSPs of both countries need to earn $1.00 profit per subscriber
• To earn the target profit of $100, WSPs of country A will charge $5 per subscriber if their cost of service is $4
• Due to 10% lower productivity, it will cost 10% more for WSPs of country B to deliver the same service, i.e., the price of offers by WSPs in country B will be higher, at $5.40 ($=4x1.10 + 1), to earn the same (normal) profits that WSPs of country can A earn thanks to higher productivity

In the cost structure step, the country prices were equalized to a common market size and cost base, as described above in examples 2 and 3. In turn, as Canadian WSPs typically earn an earnings before interest, taxes, depreciation, and amortization (EBITDA)^{footnote 16} margin of 40%, the equalized price (reflecting a common cost structure) was calculated by assigning 40% weight for market size (penetration rate, as described in Example 2) and 60% for cost base (productivity, as described in Example 3).

5.2.2 Affordability^{footnote 17}

Equalized prices—as calculated above in Section 5.2.1 Cost structure—were further equalized for country affordability level. Affordability was represented by the proxy variable GDP per capita, as described below in example 4.

Example 4: Price equalization for an affordability level

• GDP per capita is an economic metric that represents a country’s prosperity, such that subscribers in countries with relatively higher GDP per capita could be willing to pay relatively higher prices for telecommunications services.
• GDP per capita is $100 in country A and $110 in country B.
• If subscribers are indeed willing to pay 5% of GDP for telecommunications services, then the average spend on telecommunications services is $5 in country A, and $5.5 in country B., i.e., prices in country B will be 10% higher compared to those in country A, provided that all other variables remain the same.

5.2.3 IMR Demand Factor

When mobile subscribers use roaming services while visiting other countries, the WSPs of the home country pay the WSPs of other countries for the use of their network to provide roaming services to the subscribers of the home country’s WSPs, and vice versa. This means that the relative cost of a WSP’s IMR service depends mainly on net traffic, where outward IMR traffic represents the home country’s subscribers visiting other countries minus the inward IMR traffic, represented by the corresponding WSP subscribers of other countries visiting the home country.

For example, say the subscribers of Canadian WSPs generate 100 GB of data traffic on the network of a United Kingdom WSP while visiting the United Kingdom, and the subscribers of United Kingdom WSPs generate 50 GB of data traffic on the network of a Canadian WSP while visiting Canada. This would mean that the Canadian WSP has a net outward balance of 50 GB, and the United Kingdom WSP has a net inward balance of 50 GB. If the settlement rate between the Canadian WSP and the United Kingdom WSP is $2 per GB/data, then in this scenario the Canadian WSP will pay a net amount of $100 to the United Kingdom WSP, and the United Kingdom WSP will have only a net receipt of $100.

This example represents how the net traffic balance between WSPs of different countries can significantly impact their net cash flow—be it expenditure for the Canada WSP or revenue for the United Kingdom WSP—associated with IMR services^{footnote 18}. In the absence of specific regulations or policy directives, WSPs could therefore set their IMR rates based on their IMR-related net cash flow. In turn, when the IMR cost (settlement or wholesale rate between WSPs of different countries) is very low compared to the typical IMR retail rate, WSPs with a constant net inward (favourable) traffic balance could set IMR rates significantly lower than WSPs with a net outward (unfavourable) traffic balance.

Given the above, it is essential to consider the IMR net traffic balance of WSPs in the comparative analysis. The terms of IMR traffic exchange between WSPs, and associated terms of payment details, are based on confidential agreements between WSPs and are not publicly available. Two proxy variables with equal weight were therefore used to further equalize the price, as shown above in Section 5.2.2 Affordability. These proxy variables are explained below.

Gross national income/Gross domestic product ratio:

The gross domestic product (GDP) represents national income produced domestically. Whereas gross national income (GNI) represents a country’s GDP plus the net receipts of compensation from another nation to the country’s citizens. If a country’s GNI to GDP ratio is greater than one, it could be assumed that its citizens travelling abroad exceed the number of citizens visiting the country from elsewhere, which leads to a net outward IMR balance and resulting higher IMR rate, as described below in example 5.

Example 5: Price equalization for an IMR demand (GNI/GDP ratio)

• The GNI to GDP ratio of country A is 1.1 (10% higher) and 1.0 for country B.
• It could be inferred that country A WSPs will have a net outward IMR traffic balance compared to net zero balance in the case of country B WSPs.
• In other words, a WSP in country A will have a negative (net outward) cash flow representing net payments to a WSP of another country for country A’s subscriber IMR traffic.
• This means that the IMR rate of country A’s WSPs will be 10% higher than WSPs of country B, provided that all other WSP variables remain the same.

Inward Tourism Ratio:

Inward tourism implies that the citizens of other countries generate inward IMR traffic on the network of the home country’s WSP. This means that if the number of Canadians travelling to the United Kingdom is higher than the number of United Kingdom citizens visiting Canada, then the United Kingdom’s WSPs will have a favourable IMR traffic balance. In other words, Canadian WSPs will have a negative cash flow representing net payments to WSPs in the United Kingdom. As a result, the IMR rate of Canadian WSPs would likely be higher, as described below in example 6.

Example 6: Price equalization for an IMR demand (Inward Tourism Ratio)

• The number of tourists visiting country A is 110 (10% higher) and 100 to country B.
• It can be inferred that country A’s WSPs will have relatively higher inward IMR traffic than country B's.
• In other words, WSPs in country A will have around 10% more favourable cash flow compared to WSPs in country B.
• This means that the IMR rate of country A’s WSPs will be 10% lower than those of country B’s WSPs, provided that all other variables remain the same.

Equalized prices, calculated as shown above in Section 5.2.2 Affordability, were further equalized for IMR relative demand factors based on the above two proxy variables (GNI/GDP ratio and Inward Tourism Ratio), which were weighted equally.

5.2.4 Competition Factor Adjustment

Competition intensity in a country’s mobile telecommunications sector determines the market power (concentration) of its WSPs. Lower competition implies higher market concentration or higher WSP market power. It is argued that WSPs with higher market power are likely to charge a premium rate. It is therefore essential to consider the relative competition intensity of the countries studied, as part of the comparative analysis.

The Herfindahl-Hirschman Index (HHI)^{footnote 19} is commonly used to determine a market’s competition intensity. Accordingly, HHI (based on WSP market share) was calculated for each of the countries studied (refer to Appendix A for details). Based on the HHI, the prices calculated (above in Section 5.2.2 Affordability) were further equalized for the competition factor, as described below in example 7.

Example 7: Price equalization for Competition Factor

• HHI is 3,000 for country A and 2,500 for country B.
• It can be inferred that, due to higher market concentration, WSPs in country A have relatively higher market power compared to those in country B.
• In other words, WSPs in country A could charge a higher (premium) rate by 20% (=3,000/2,500-1) compared to those of country B, provided that all other variables remain the same.

5.2.5 Limitations of IMR Rate Equalization

As noted in Appendix G, this study's main limitation is that a linear relationship has been assumed between the above socioeconomic factors and the country's price level. Generally, the relationship is not linear and is determined based on extensive econometric modelling. However, due to the complexity of relevant data collection and analyses, it was not possible to complete the econometric modelling within the given time for this study.

5.3 Relative Price Under Similar Socio-Economic Conditions

The main purpose of price equalization was to better understand the IMR rate of WSPs in the comparator countries, were they to operate in the same socio-economic conditions as Canada—refer to the factors explained in Section 4.2 Socio-economic Factors Data and listed in Table 1.

The comparative analysis shows that, if the IMR rate is $1 in the case of Canada, the relative price in the comparator countries with similar socio-economic conditions as Canada, will likely be as shown below in Figure 2.

Figure 2: Relative price under the same socio-economic conditions

In summary:

• Australia (66%) and Mexico (75%) would have lower IMR rates than Canada.
• Germany, Italy, and Japan would have higher IMR rates (1.45 to 2.49 times) than Canada.
• The United States (3.22 times) and the United Kingdom (4.06 times) would have IMR rates more than three to four times higher than Canada, attributable mostly to a relatively higher IMR demand driver compared to inward tourism. For the same reason, France’s IMR rate would be higher (6.13 times) than Canadian IMR rates.

As shown in Figure 2 above, cost is the main factor leading to IMR rate differences. For example, if WSPs in France operated with the Canadian WSP cost factor, their IMR rates would be 2.44 times higher. The same is true of Germany (1.23), Italy (1.50), Japan (1.48), the United Kingdom (1.67), the United States (1.22), and Australia (1.10), whose IMR rates would also be higher were their WSPs operating with the Canadian WSPs cost factor. However, it is worth noting these cost differentials also reflect the cross-impact of other socio-economic factors. For example, a country with a higher per capita GDP (affordability) is likely to have a relatively higher cost of inputs to produce goods and services. In this context, if the cost factor is fully excluded, then based on the equalization of other socio-economic factors, the Canadian prices would be higher by over ~10% than those of comparator countries.

Among the other socio-economic factors, relatively lower inward tourism is the most significant factor contributing to higher IMR rates in Canada. Compared to Canada’s average annual tourist arrivals, those in comparator countries are higher: France (6.98), the United States (5.62), Mexico (2.97), Italy (2.80), the United Kingdom (1.21), and Germany (1.14); only Australia experienced relatively fewer tourist arrivals (25%), as shown below in Figure 3. If inward tourism is excluded, then based on the equalization of other socio-economic factors, including cost, the Canadian prices would remain lower by around 20% than those of comparator countries.

Figure 3: Annual Inward Tourist Arrivals (Average 2011-2020)

6 IMR Comparative Rates Summary

The IMR comparative rate analysis of the three IMR service categories is summarized below and detailed in Appendices B (B-1 to B-5).

Note: Under the current EU Roaming Regulations, WSPs in EU member states do not charge subscribers for roaming within EU member states. However, home WSPs charge the applicable IMR rate if a subscriber makes a voice call or sends a text message to countries outside the EU from the roaming country, or exceeds the specified quota, or uses a data service such as an “internet everywhere”. Therefore, any rates between France, Germany, Italy, and France, shown in the tables below represent the rates applicable between the EU member state (including the United Kingdom) and other non-EU countries and/or charges for exceeding the specified quota.

6.1 IMR-PPU Rates (per voice call minute)

6.2 IMR-PPU Rates (per text message)

6.3 IMR-PPU Rates (per MB of data)

6.4 IMR Fixed Rate Plan

6.5 IMR Bundled Plan

7 Analysis

7.1 IMR-PPU Rate

As noted above, Canadians use, on average, 232 MB of data per day. Based on the observed IMR offers in all the countries studied, the average voice call and text message daily quota is around 125 minutes (voice calls) and 125 texts (messages). If an average subscriber were to use the IMR-PPU rate, it would be significantly more expensive than using the IMR fixed rate plans. For example, as shown below in Figure 4, a Canadian would pay around $935 per day for roaming in the United States at a IMR-PPU rate, which is 87 times higher than the price of $12.87 per day with a fixed daily IMR plan. A similar difference is found in countries with the lowest IMR-PPU rates, e.g. France’s subscribers roaming in Italy or the United Kingdom would pay around $48 at IMR-PPU rates compared to $16 with an IMR fixed rate plan.

Figure 4: IMR-PPU Comparative Rate Scenario

For these reasons, the IMR-PPU rate is not the best option for travellers looking for affordable roaming rates. Travellers tend to use the IMR-PPU option only as needed in emergencies or in countries not included in their home WSP’s IMR fixed rate plans, when IMR rates apply within the EEA.

7.2 IMR Fixed Rate Plans

Canadian WSPs (as detailed in Appendix F-2) mainly offer IMR fixed daily rate plans, which allow subscribers to use their domestic plan for roaming in other countries, provided that the country visited is included in their WSP’s plan.

Canadian WSPs’ daily rate offers include a maximum bill amount limit for IMR charges. This means that, if a subscriber used an IMR fixed rate plan for several days within their WSP’s billing cycle, the total amount of the IMR daily rate charged to the subscriber would not exceed the maximum specified amount. For example, if the daily rate is $15 and the maximum billing amount is $300, the WSP would charge a maximum of $300 even if the subscriber continuously roams for more than 20 days within the same billing cycle, ranging from $100 to $400, within a billing cycle as shown below.

However, the WSPs in the comparator countries offer a wide range of IMR fixed rate plans, ranging from a fixed usage quota of data (MB/GBs), voice calls (minutes), and text (messages) for a single day up to more than 30 days.

7.2.1 Japan – Comparative IMR Fixed Rate Plan Scenarios

The IMR fixed rate plans of comparator countries were examined for a better understanding of the rate difference. This required simulating those plans to mimic Canadian WSPs’ fixed daily usage for up to 28 days using the average Canadian usage of 232 MB per day. The following four scenarios were developed, accordingly, using Japan as the destination country.

1. Scenario-I: (232 MB/Day 1-7 days to Japan) at Average IMR Rates

   As shown in Appendix C-1, Canada’s IMR rate of $15.59 falls close to the middle of the range with lower rates ranging from $6.27 (Australia) to $10.55 (Germany). Because Canadian rates increase linearly by each increment of the day, it becomes the second most expensive after the fourth day of use, increasing to $62.37 on the fourth day, following Mexico ($105.52). Following the fourth day the Canadian plan becomes the second most expensive, increasing to $109.14 on the seventh day, following Mexico’s $357.78.

2. Scenario-II: (232 MB/Day 7-28 days to Japan) at Average IMR Rates

   As shown in Appendix C-2, Canada’s IMR rate of $109.14 remains the highest (after Mexico) until the 21st day of use, increasing to $316.09 on the 21st day, and $335.93 on the 28th day. From the 21st to the 28th day, Canada remains lower than the United Kingdom ($465.13), Italy ($540.07), France ($656.33), and Mexico ($1,475.55).

3. Scenario-III: (232 MB/Day 1-7 days to Japan) at Minimum IMR Rates

   As shown in Appendix C-3, Canada’s IMR rate of $14.00 (Videotron) falls close to the middle of the range with lower rates ranging from $4.24 (Australia) to $9.78 (Italy). Since Canadian rates increase linearly by each increment of the day, it becomes the most expensive on the fourth day of use ($56), increasing to $98 on the seventh day. On the fourth day, the rate range is $8.37 (Germany) to $50.09 (France), and the rate range on the seventh day is $8.37 (Germany) to $66.03 (Mexico).

4. Scenario-IV: (232 MB/Day 7-28 days to Japan) at Minimum IMR Rates

   As shown in Appendix C-4, Canada’s IMR rate of $98 (Videotron) on the seventh day of use remained the highest until the 14th day of use ($196). On the 21st day of use, Canada’s rate ($260) is the second highest (after Mexico $376.36) and the third highest on the 28th day of use, after Italy ($273.70), and Mexico ($501.80).

   As shown in the following sub-section, the various options offered by comparator countries allows some of their subscribers to pay much lower rates than the national averages of their home country. Whereas Canadian subscribers do not have access to such a variety of offers, and consequently their IMR service becomes the most expensive in the countries studied (except Mexico) at the low end of IMR fixed rate plans.

   It is noteworthy that the IMR fixed daily rate plans of Canadian WSPs are significantly cheaper than any IMR-PPU rate offers across the countries studied.

7.2.2 Australia – Comparative IMR Fixed Rate Analysis

As outlined below in Table 2, Canada's IMR fixed rates for Australia rank in the middle of the countries studied for usage up to three days. Canadian IMR rates become one of the two highest for usage beyond three days, until the subscriber reaches the maximum bill amount limit after the 21st day of usage—then the Canadian rates return to the middle range. However, Canadian rates remain among the lowest when the IMR rates of comparator countries are equalized based on socio-economic factors.

7.2.3 France – Comparative IMR Fixed Rate Analysis

As outlined below in Table 3, Canada's IMR fixed rates for France rank among the three highest (including Mexico and Japan) of the countries studied. However, Canada’s ranking moves to the middle range if the IMR rates of the comparator countries are equalized based on socio-economic factors.

7.2.4 Germany – Comparative IMR Fixed Rate Analysis

As outlined below in Table 4, Canada's IMR fixed rates for Germany rank among the three highest (including Mexico and Japan) of the countries studied. However, Canada’s ranking moves to the middle range if the IMR rates of the comparator countries are equalized based on socio-economic factors.

7.2.5 Italy – Comparative IMR Fixed Rate Analysis

As outlined below in Table 5, Canada's IMR fixed rates for Italy rank among the three highest (including Mexico and Japan) of the countries studied. However, Canada’s ranking moves to the lower middle range if the IMR rates of the comparator countries are equalized based on socio-economic factors.

7.2.6 Japan – Comparative IMR Fixed Rate Analysis

Japan’s rates are discussed above in Section 7.2.1.

7.2.7 Mexico – Comparative IMR Fixed Rate Analysis

As outlined below in Table 6, Canada's IMR fixed rates for Mexico rank among the three highest (including France and the United Kingdom) of the countries studied. However, Canada’s ranking moves to the lower middle range if the IMR rates of the comparator countries are equalized based on socio-economic factors.

7.2.8 United Kingdom – Comparative IMR Fixed Rate Analysis

As outlined below in Table 7, Canada's IMR fixed rates for the United Kingdom rank among the three highest (including Mexico and Japan) of the countries studied. However, Canada’s ranking moves to the middle range if the IMR rates of the comparator countries are equalized based on socio-economic factors.

7.2.9 United States – Comparative IMR Fixed Rate Analysis

As outlined below in Table 8, Canada's IMR fixed rates for the United States rank among the middle of the countries studied for use up to three days. Canadian IMR rates become one of the top two highest for usage beyond three days until the subscriber reaches the maximum charge amount limit after the 21st day—then the Canadian rates rank among the three highest. However, Canadian rates are among the three lowest if the IMR rates of the comparator countries are equalized based on socio-economic factors.

This analysis shows that Canadian IMR fixed rates are generally among the highest for usage exceeding three days. However, for countries such as Australia, Japan, and the United States, Canadian IMR rates rank among the middle range for usage up to three days.

It is noteworthy that EU countries (Germany, France, Italy) and the United Kingdom offer significantly lower rates among member countries due to the EU Roaming Regulations. Whereas their rates for non-EU destinations are sometimes among the highest. For example:

• For Mexico, the highest average rates include $405.35 (United Kingdom) and $656.33 (France) for usage of 21 and 28 days—28% higher than Canadian rates of $316.09 for 21 days, and 95% higher than the Canadian rate of $335.93 for 28 days.
• For the United States, the highest average rates include $395.75 (United Kingdom) and $522.86 (United Kingdom) for usage of 21 and 28 days—53% higher than Canadian rates of $258.15 for 21 days, and 90% higher than the Canadian rate of $275.51 for 28 days.

In turn, for usage beyond 21 days, Canadian rate plans rank among the lower half of comparable rate plans of the comparator countries, thanks to the maximum IMR charges amount limit offered by Canadian WSPs.

Figure 5 below provides a comparison of average Canadian IMR fixed rate plan (representing the average of the rates offered by the comparator countries) with the combined average of the comparator countries.

Figure 5: IMR Fixed Rate Plan Comparison – Average Canadian Rates vs. Average International Jurisdictions

As shown above in Figure 5, on average Canada’s IMR rates are 6% lower than the international average for one day’s usage ($15.30 vs. $16.30). From the second day to the 21st day, it remains higher than the international average: 26% (second day), 44% (third day), 67% (fourth day), 61% (fifth day), 77% (sixth day), 79% (seventh and 14th day), 53% (21st day). On the 28th day, the Canadian average ($328.4) all but matches the international average ($329.7). This is also the point when the subscriber typically reaches the maximum IMR charges limit offered by Canadian WSPs.

This suggests that Canadian subscribers are likely to find IMR fixed rates relatively more expensive if they use IMR services for more than a day, before reaching the maximum total IMR charges limit within their WSP’s billing cycle, due to the lack of flexible options,

7.3 IMR Bundled Plan

As shown in Appendix B-5, Canadian WSPs offer IMR bundled plans to roam in France ($65), Germany, Italy, the United Kingdom ($70.00), Mexico ($102.99), and the United States ($102.04). WSPs in these countries (except Germany and Australia) also offer similar IMR bundle plans to their subscribers to roam in Canada. These plans are priced relatively lower in Japan ($26.72), Italy ($55.74), the United Kingdom ($61.77), and the United States ($76.51), and relatively higher in France ($81.77) and Mexico ($113.23).

Canadian rates are expected to be higher than the corresponding rates for Canada offered by WSPs of the comparator countries, because Canadian IMR offers are bundles with domestic plans. This is due to the rates for Canadian domestic mobile service being generally higher^{footnote 20}, as well as the cost differences explained above in Section 5.3.

The IMR offers bundled with domestic plans are typically useful to subscribers who frequently travel abroad for an extended period. Canadian mobile average revenue per user (ARPU)^{footnote 21} in 2022 was $69.^{footnote 22} Based on this ARPU, it seems that Canadian WSPs charge a significant premium for IMR service on their domestic plans for Mexico (49%) and the United States (48%), whereas there is no premium in the case of France and the United Kingdom. Based on the Wall Communications 2023 Price Study—Mobile Service Basket Levels 7, and 8 domestic plan prices—France ($35), Italy ($20), and the United Kingdom ($36) also appear to be charging a significant premium for their subscribers to roam in Canada: France (233%), Italy (279%), and the United Kingdom (172%). The United States ($80), however, appears to apply no premium for their subscribers to roam in Canada using their domestic plan.

7.4 Other Considerations

As noted above, in every jurisdiction, apart from European consumers traveling to member states in the EEA, the price charged to consumers for IMR is much higher than what is charged for domestic roaming. However, based on the publicly available data it is difficult to ascertain whether the home WSPs apply excessive markups to their IMR rates, or foreign WSPs apply excessive markups to their wholesale IMR rates, or both.

Based on the review of European and Canadian regulatory proceedings for domestic roaming it appears that the network cost of WSPs offering roaming services to a visiting subscriber range between $2.30 to $10 per GB^{footnote 23}, significantly lower than the IMR retail rate offers.

It is worth noting that there is no significant direct incremental cost to home WSPs when their subscribers use their mobile service in foreign jurisdictions. The only direct incremental cost is the settlement (wholesale) rate the destination jurisdiction WSPs charge to carry the traffic of their subscribers on their mobile access network (RAN). When a subscriber is roaming in a foreign jurisdiction, the home WSP’s RAN, which typically represents over 90% of the network cost, is not used. Only the core network and interconnection/clearing services, which typically is less than 10% of the home WSP’s network cost are used.

Finally, it is also worth noting that the great adoption of technological advancements in recent years may allow mobile subscribers to reduce their roaming charges. For example, e-SIM, (embedded SIM) technology allows subscribers to switch WSPs dynamically with minimal disruption to service. e-SIM, technology might eventually allow mobile users to concurrently subscribe to services from several WSPs in their home country and dynamically switch to the most economical WSP at any time while retaining their phone number. While this concept is more applicable to domestic use than international roaming, frequent travellers could still use e-SIM technology and maintain subscriptions in several countries to reduce their IMR charges. The Global System for Mobile Communications Association (GSMA)^{footnote 24} has been a strong advocate of the e-SIM technology and Apple has adopted it in its devices in the last few years^{footnote 25}. Although the adoption of the technology has faced some resistance from WSPs and has been slower than anticipated to date, e-SIM technology is required for IoT and M2M^{footnote 26} and might eventually contribute to the reduction of IMR rates.

8 Conclusion

IMR-PPU rates appear to be very expensive across the non-EU countries studied. This does not apply to EU members, where there are no additional charges for roaming services within member states due to the EU Roaming Regulations. Charges do apply if the subscribers of EU members use their mobile service for non-EU countries while roaming with the EU member state or exceed their usage quota.

Consequently, IMR-PPU rates are not the most viable option for subscribers across the countries studied, except in the case of EU countries and travel within the EU.

Therefore, subscribers of countries outside the EU are likely to use the IMR-PPU option only in emergencies, inadvertently, or in a country not included in their home WSP’s IMR fixed rate plan.

WSPs offer IMR-bundled services for a limited number of countries, based on demand and the needs of subscribers. For example, as detailed in Appendix B, Canada does not have IMR bundled services for Australia and Japan. Similarly, Australia does not have IMR bundled services for any of the comparator countries.

Therefore, IMR fixed rate plans are the preferred options for most subscribers, particularly for destinations not included in their home WSPs’ IMR bundled service.

It is noteworthy that IMR bundled offers, when available, can be less expensive than IMR fixed rate plans combined with the domestic plan, depending on the roaming period requirement. For example, using Level 5 (7-9 GB) Mobile Domestic Plan^{footnote 27}, Figure 6 below illustrates the price difference between the Canadian IMR bundled and IMR fixed rate combined with the domestic mobile service plan. The average rate of IMR bundled plans for the United States is $102.99, which is more expensive for Level 5 mobile service subscribers, with an average roaming requirement in the United States of less than five days per month. In the case of a Canadian subscriber who travels frequently to France, Germany, Italy, and the United Kingdom, they are likely to find IMR bundled less expensive ($65 to $70) if they need to roam for more than two days per month.

Figure 6: Canadian IMR Comparison - [IMR Fixed + Domestic] Plan vs. IMR Bundled

The Canadian IMR fixed rates are generally among the highest for usage exceeding three days. For countries such as Australia, Japan, and the United States, Canadian IMR rates rank among the middle range for usage up to three days.

For usage beyond 21 days, the Canadian rate plans rank among the lower half of comparable rate plans of the comparator countries because of the maximum IMR charges limit offered by Canadian WSPs. For example, on average Canada’s IMR rates are 6% lower than the international average for one day’s usage ($15.30 vs. $16.30). From the second day to the 21st day, Canada’s IMR rates are higher than the international average: 26% (second day), 44% (third day), 67% (fourth day), 61% (fifth day), 77% (sixth day), 79% (seventh and 14th day), 53% (21st day). On the 28th day, the Canadian average ($328.4) all but matches the international average ($329.7). This is also the point when the subscriber typically reaches the maximum IMR charges limit offered by Canadian WSPs.

This suggests that Canadian subscribers are likely to find WSPs’ fixed rate plan rates more expensive if they use IMR service for more than a day and before reaching the maximum total IMR charges limit of their WSP’s billing cycle. As detailed in Appendix F, this is because the comparator countries offer various IMR fixed rate options, including:

1. roam with a domestic plan for an additional daily fee;
2. roam with a specified usage (voice call minutes, number of text messages, and MB of data) for a specified number of days at a fixed price; and,
3. same as b) for data-only, voice-only, text-only, or different combinations of these three services.

Such flexible rate options allow subscribers to select rate plans based on their needs, which effectively results in lower IMR rates.

In the case of Canada, the IMR service becomes more expensive among the countries studied because subscribers do not have access to such a variety of offers. For usage beyond 21 days, the Canadian rate plans rank in the lower half of comparable rate plans offered by the comparator countries because of the maximum IMR charges limit offered by Canadian WSPs.

The IMR fixed rate plan offered by Canadian WSPs allows subscribers to use the domestic plan while roaming in another country. Mobile usage while travelling abroad can vary from domestic usage—it can be limited to a fixed quota of data usage or voice call minutes, or number of text messages, or different combinations of these service for a specified number of days. For example, a subscriber might only need voice calls and text messaging while roaming abroad rather than the data usage allowance included in their domestic plan. Moreover, different subscribers can have different domestic plans ranging from 1 GB data to 100 GB allowance per month, but they pay the same IMR rate. In summary, Canadian subscribers are likely to pay higher IMR rates than comparator countries because of the lack of flexible options available to subscribers of comparator countries.

Appendices

Appendix A: Herfindahl-Hirschman Index (HHI)

Appendix B: IMR Comparative Rates

Appendix B-1: IMR-PPU (per minute)

Comparison of Rates Offered by WSPs

Comparison of Equalized Rates

Comparison of Equalized Rates

Comparison of Equalized Rates

Comparison of Equalized Rates

Comparison of Equalized Rates

Appendix C: IMR Fixed Rate Profile Analysis

Appendix C-1: Scenario-I: [232 MB/Day | 1-7 days | To Japan] at Average IMR Rates

Appendix C-2: Scenario-II: [232 MB/Day | 7-28 days | To Japan] at Average IMR Rates

Appendix C-3: Scenario-III: [232 MB/Day | 1-7 days | To Japan] at Minimum IMR Rates

Appendix C-4: Scenario-IV: [232 MB/Day | 7-28 days | To Japan] at Minimum IMR Rates

Appendix D: IMR Fixed Rate Comparative Analysis [28-Day | Usage Scenario: 232 MB per day | Average Offered Rate Basis]

Appendix D-1: Australia [28-Day Usage | 232 MB per day | Average Rate]

Appendix D-2: Canada [28-Day Usage | 232 MB per day | Average Rate]

Appendix D-3: France [28-Day Usage | 232 MB per day | Average Rate]

Appendix D-4: Germany [28-Day Usage | 232 MB per day | Average Rate]

Appendix D-5: Italy [28-Day Usage | 232 MB per day| Average Rate]