VancouverIn a strip mall in Vancouver, in a Public Mobile dealer's office no larger than a closet, a customer can sign up for a plan with twenty gigabytes of nationwide LTE data at a price that, on the company's website, is roughly two-thirds lower than what the parent brand of the same network charges, at retail, for an equivalent service. The plan works. The network is the same. The signal is the same. The customer-service experience is, depending on the day, slightly worse. The savings, calculated over a year, are sufficient to fund a month's rent in many of the country's smaller cities. None of this is a secret. None of it is a hack. It is the operating reality of a sector whose pricing structure the country has been, for two decades, asked not to look at too closely.

Public Mobile is owned by Telus. Lucky Mobile is owned by Bell. Chatr is owned by Rogers. Each of the country's Big Three has a budget brand. Each of the budget brands offers, in plain terms, the same network as the parent at a fraction of the parent's price. The pricing differential is not explained, in any of the brands' public materials, by any difference in the underlying service. The pricing differential is explained, internally, by the strategic choice each parent has made to segment the market: the customers willing to pay the parent's price are routed to the parent; the customers who would otherwise defect from the country's mobile market entirely are routed to the budget subsidiary. The subsidiary is, in this design, not a competitor. It is a relief valve.

What the relief valve reveals

The existence of the relief valve is, on inspection, the most damning available piece of evidence about Canadian mobile pricing. If the budget brand can deliver the same network at a third of the price and the firm operating both brands can profitably run the budget brand, the parent brand's price is not, in any honest accounting, a reflection of cost. The parent brand's price is a reflection of what the firm has decided to extract from the customers who do not, or cannot, switch. Those customers are, on average, older, in longer tenure on their plans, less likely to comparison-shop, and more likely to be locked into a device-financing arrangement that obscures the underlying service price. The parent brand's pricing is, in plain English, the price of inattention.

If the budget brand can deliver the same network at a third of the price, the parent brand's price is not a reflection of cost. It is a reflection of what the firm has decided to extract from the customers who do not, or cannot, switch.

Why this matters more than it sounds

The country's mobile sector is, by every available international comparison, one of the most expensive in the OECD. The CRTC has, in three of its most recent monitoring reports, acknowledged this. The CRTC has also, in those same reports, declined to enforce any meaningful structural intervention. The reason for the non-intervention is a regulatory arrangement that pre-dates the smartphone. The Big Three are licensed under spectrum agreements that grant them the use of the country's wireless airwaves on terms that have been steadily renewed since the late 1990s, with consultation requirements that, in practice, allow the incumbents to shape the terms of every renewal. The barrier to a fourth competitor of meaningful scale is, on the present rules, structural. The country has tried to import one, Verizon, in 2013, considered entry; the incumbents lobbied successfully against the regulatory accommodations that would have made entry feasible. The country has tried to grow one, Freedom Mobile, in its various forms, has operated as a perpetual junior partner whose subscriber base never crosses the threshold at which the Big Three would treat it as a serious threat.

The customer's workaround

The customer's workaround is the budget subsidiary. Public Mobile is, for the time being, the best of the three. Its plans are clearer. Its customer service is, on most days, faster than the parent's. Its terms allow porting, allow switching, and allow self-service through an app that is, on the available reviews, less frustrating than the parent's. The customer who switches saves money. The customer who does not switch does not. The country's mobile market, in its current configuration, is a market that rewards information and punishes habit.

This magazine recommends, on the simple math, that any Canadian household paying more than forty dollars a month per line on a Big Three parent plan should, in the next thirty days, port to the corresponding budget brand. The corresponding budget brand is owned by the same firm. The network does not change. The service does not change. The price does. The number of households this advice applies to is, on the publicly available subscriber data, in the millions.

What the country could fix, structurally

The relief valve is a workaround, not a solution. The structural fix is mandatory wholesale access for mobile virtual network operators on terms set by the regulator rather than by the host carrier, on a schedule the regulator publishes annually. The regulator has, in 2024 and 2025, taken small steps in this direction. The steps have been small. The country could, in a single CRTC decision, set wholesale rates at a level that would permit a meaningful number of new entrants to operate at sustainable margins. The country has not done so. The country has, in the meantime, the budget subsidiary. The budget subsidiary is, on the kitchen-table math, enough to make the difference between a tight month and a comfortable one for most Canadian households that take ten minutes to switch. Take the ten minutes.