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World Economic Forum spotlights telecom problems

Another day, another study showing Canada sucks as far as telecommunications is concerned. This time, it’s the World Economic Forum saying so.

The Switzerland-based think tank has released its tenth annual Global Information Technology Report and the findings probably won’t surprise anyone. Telecom industry folks are sure to dispute the negative findings and accentuate the positives in this comprehensive report - and at 435 pages, it really is comprehensive. In the end, no one should be fooled; the report is largely in line with other neutrally-produced international studies, which have also found Canada wanting.

First, the good. Canada ranks well in the report’s overall measure, called the Networked Readiness Index, placing eighth out of 138 countries. The NRI rates countries on some 70 inputs, which cover everything from the quality of math and science education to high-tech exports and cellphone rates. Canada’s position is good and has improved since 2006, although it did slip down a spot from last year’s report. The report should not be read, however, as an endorsement of anything done by businesses or government. It very clearly states that NRI rankings are a holistic summation of what is going on in a country, which involves everyone: businesses, government, educational institutions and individuals.

The World Economic Forum describes its NRI as:

The capacity of countries to fully benefit from new technologies in their competitiveness strategies and their citizens’ daily lives. The Index has allowed private and public stakeholders to monitor progress for an ever-increasing number of economies all over the globe, as well as to identify competitive strengths and weaknesses in national networked readiness landscapes. In doing so, the NRI and the series have grown into a unique policy tool in the discussion and design of national strategies to increase networked readiness and overall competitiveness.

Canada places particularly well in the sophistication of its financial markets; the ease of starting a business; electricity production; quality of education system; landline phone rates; and strangely, internet and telephone competition. More on that in a second. Here’s how the report explains Canada’s ranking:

Canada (8th) slips one position, essentially because of its lower marks in the usage component of the Index (14th, down six places). Nevertheless it displays a strong showing, mainly driven by a very ICT-conducive environment (5th) and high levels of individual readiness (6th) and government usage (5th). Individual and business usage are weaker at 23rd and 22nd, respectively: comparatively low penetration rates for mobile telephony remains a notable problem for the country (70.9 per 100 population, corresponding to 95th place). On a similar note, Canadian businesses appear less prompt than their southern neighbors to harness new technologies or to produce and export innovative products in the international markets — the country ranks 20th for PCT patent applications per million population (80.2) and only 9.2 percent of its goods exports are high-tech products (28th).

As is obvious, Canada has problems in other areas besides telecom, but that issue in particular warrants spotlighting because it is an incredibly important enabler of all the others. Exports and patents, for example, won’t get very far in today’s economy without great telecommunications to disseminate them. Canada’s showing can be taken to mean that the country is well positioned when it comes to the modern economy, but it isn’t capitalizing for some reason. I’d liken it to being dealt a great poker hand, which is great - unless you don’t know how to play poker. Or, perhaps more accurately, the guy next to you keeps stealing your good cards.

Canada’s top marks in the “internet & telephony competition” category bears some explaining. The category assesses points for three services: internet access, international long-distance calls and mobile phones. A monopoly in any of those subcategories scored zero points, partial competition scored one point and competition got two points. Canada got a full six points, but before the telecom lobbyists get too excited about the result, more than 60 other countries also scored the top mark, including the likes of Georgia, Burundi and the Kyrgyz Republic. Clearly, the report’s bar for determining the level of competition for a particular service has been set low.

As the mission statement above says, the report’s purpose is to identify problem areas so that countries can work on them. In that sense, here are the areas in which Canada ranks in the bottom half, or close to: residential phone installation cost (#83), residential monthly phone subscription cost (#93), mobile phone fees (#66), business monthly phone subscription cost (#117!), mobile phone subscriptions per capita (#95!), mobile phone subscriptions with data per capita ($68). Hmm. Is there a pattern there? It seems that just about the most expensive thing Canadians can do is talk to each other. That doesn’t sound too “networked ready.”

For fixed broadband, the report ranks our prices at 23rd place, behind the likes of the United States, Australia and New Zealand. It’s not a terrible showing, but it’s certainly not world-leading like the hooey Bell’s lobbyists have been trying to sling recently.

Overall, the report paints a pretty clear picture and reconfirms that Canada needs a lot of help when it comes to telecommunications services.

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