BUSINESS
06/09/2011 08:02 EDT | Updated 08/09/2011 05:12 EDT

Wireless Roaming Fees: Canadians Pay The Most, No Competition Seen

AP File

THE CANADIAN PRESS -- TORONTO - Canadians are paying some of the highest prices in the world for wireless data service while away from their home turf, suggesting there isn't enough competition in this country, according to a report by the OECD.

The organization, which represents most of the world's most economically advanced countries. compared 68 operators and, in one scenario, Canadians faced the priciest roaming charges.

Roaming charges are applied when a call, message or download must travel through more than one wireless carrier to get to its destination. The report found a wide range of fees among the OECD member countries.

When estimating the cost of one megabyte of data in one downloading session, Canadians faced an average price of US$24.61 -- about double the average price of US$13.52.

The next most-expensive rates were $22.06 for Americans and $19.85 for Mexicans. The cheapest price was $4.17 per megabyte for Greek consumers.

At the $24.61 rate, consumers who take a photo with an smartphone camera and post it to Facebook while out of their carrier's service area could have to pay up to $100 per photo depending on the size of the picture.

In another test done for the report, comparing the price to use up one megabyte of data over five different days, Canada ranked fifth most expensive.

But, in a test of pricing for using five megabytes of data over five days, Canada was not among the most expensive countries.

The report published Wednesday by the for Economic Co-operation and Development suggests consumers need to be protected against unintentional data usage and that current prices show there isn't enough competition in Canada.

Brent Johnston, vice-president of mobility marketing at Telus, said he agrees that Canadians have paid too much in the past but said that's changing, now that Rogers isn't the only Canadian carrier with international roaming agreements with foreign carriers using the most widely used standard.

Johnston said Telus (TSX:T) has since upgraded its technology and is planning to charge less than $12.50 per megabyte beginning in June, after negotiating new agreements.

"The opportunity for competition is very real in Canada on this front. It's not that there needs to be more (competition), perhaps its just beginning of change in international roaming in Canada.

University of Ottawa professor Michael Geist, who studies technology issues, said Canada needs to change laws to allow foreign competitors into the market, which would bring their already-negotiated roaming agreements with them and increase competition among telecom companies in Canada.

He also said that Canada's wireless contracts, which can run as long as three years, make it impossible for Canadian cell phone users to use local wireless carriers in other countries because cellphones are locked to only be used with their home network.

"We need to see legislation that says once your contract has expired or your phone is effectively paid off that carriers are obligated to unlock it so that consumers can easily consider to use their phone without the need to incur these large roaming fees," he said.