Shopify CEO pushes for cheaper wireless data in Canada

Shopify CEO and founder Tobias Lütke is calling for cheaper wireless data costs in Canada.

“We need to get wireless data to be cheaper here [in Canada] to make Canadian’s digital familiarity and disposition more in line with other advanced economies,” Lütke wrote on Twitter.

The 37-year-old businessman was responding to a tweet from journalist Peter Nowak, who shared a report detailing how wireless data usage growth in Canada is much slower than in other countries. The reason for this, as Nowak noted, is because Canadians pay some of the highest wireless data prices in the world.

This is one of those cause-and-effect loops that ends up depressing Canadian productivity numbers. We need to get wireless data to be cheaper here to make Canadian’s digital familiarity and disposition more in line with other advanced economies. https://t.co/ORs2m0efJU

— Tobi Lütke (@tobi) July 10, 2018

Therefore, Canadians are deterred by the cost and end up using less than half of the data that Americans use.

While Canadians have been able to benefit from certain low-cost plans, like the highly-publicized $60/10GB promotion from December, the rate at which such deals are offered is very low. Part of the problem is that because standard prices are so high, the big savings end up being “more costly than expected” for carriers, according to Barclays analyst Philip Huang.

In a note to clients, Huang pointed out that carriers reported high churn rates and a “repricing of the base” after a significant portion of customers took advantage of the significantly lower-than-usual monthly rate. As a result, Huang said that a promotion on that scale isn’t likely to return, at least not any time soon. Even smaller bonus data promos that were offered for a longer period of time have recently ended, making it difficult for Canadian consumers to catch a break with their traditionally pricey plans.

On Twitter, Lütke also addressed the fact that certain data plan-related problems are unique to Canada among other advanced economies. In response to his original tweet, Twitter user @madmath said “I feel like innovation (outside of telcos helping) is hard because unlike cable/DSL internet which can be shared via networking equipment, mobile data is tied to a SIM card thus completely locked down to a single device. “Shared” plans are possible but Telco controls the price!”

same problem doesn't exist in other G7 countries

— Tobi Lütke (@tobi) July 10, 2018

Protected home market (may be a good thing), side agreements (bad thing)

— Tobi Lütke (@tobi) July 10, 2018

As Lütke noted, however, these aren’t concerns with the other G7 countries — France, Germany, Italy, Japan, the United Kingdom and the United States.

Lütke pointed out that a protected home market in Canada and carrier side agreements with other companies are two big reasons for Canada’s higher prices.