Mobile phone adoption rising, but Canada lags behind 16 April, 2009 By Chris Talbot

Additionally, while in most countries, the majority of those without a cell phone (aged 16 to 60) plan to purchase one in the next 12 months, Canada is the reverse, with most of those without a cell phone having no plans to buy one in the next 12 months. Rajaie Matuk, a research director at TNS, explained this phenomenon as being related to higher cellular costs combined with a mature and affordable landline phone network, which many other countries don't have.

However, the U.S. has a mature and affordable landline network, so the key difference is in costs. Cellular phone costs are higher in Canada, which Matuk said has led to a lower adoption rate.

"There is a difference in cost of usage in canada and the U.S.," Matuk said.

More local, low-cost competitors exist in the U.S., and for high-usage users, the deals are simply better in the U.S. than in Canada, he said. The very bottom-end deals aren't much different, but at the higher-end, Canada is lacking in good 1,000-minute-per-month deals that are more commonly found in the U.S.

"We're not likely to have these monster time plans in Canada," he said.

It's cheaper to run a cell phone in the U.S. than in Canada, he said.

Adoption of mobile phones in other areas of the world is driven much by how difficult it is to get a landline phone, Matuk said.

"You don't need a cell phone the way you do in Morocco or somewhere," he said.

While North America does have a generation that doesn't know life without cell phones, there's the other end of the spectrum that believes, especially in Canada moreso than the U.S., that it can live without cell phones and rely on cheap landline service, Matuk said.

Another key difference between the U.S. and Canada is the mobility of the American population, he explained. People in the U.S. are much more likely to move around than they are in Canada, so they're less likely to rely on cell phones. Canadians can and do rely more heavily on landlines.

"Among developed nations, it's pretty unique," Matuk said about Canada.

At the same time, smartphone adoption is on the rise. On a global basis, smartphone penetration was at 13 per cent in 2008, but is at 20 per cent this year. In North America, it was at 12 per cent last year and has hit 27 per cent in 2009. Canada falls short of the U.S., though, with its adoption being 12 per cent in 2008 and 21 per cent in 2009.

That increase in smartphone adoption has been driven a lot by the introduction of the Apple iPhone, even if people aren't buying iPhones, Matuk said.

"Smartphones have definitely taken off from the last half of last year and into this year. They are the 'it' technology," he said.

Similarly to what happen with the introduction of the iPod and the succeeding increase in MP3 player sales across the board, the iPhone is driving an interest in smartphones, Matuk said.

"At the same time that you're getting the iPhone being introduced and becoming very popular, network providers were starting to provide better and more friendly consumer data plans," he said.

Still, the difference in data plans between the U.S. and Canada is significant. Data still isn't cheap, but it's become more affordable in Canada since the introduction of the iPhone. However, it's still cheaper to get data packages in the U.S.

Changes in cell phone usage are driving adoption of data plans everywhere, though. It's no longer enough to use a cell phone for voice and text messaging. Now people are using it to stay connected through sites like Facebook and Twitter, so they can be in touch no matter where they are, Matuk said.