Time Canadians spend online climbs as people shift to small screens As Canadians spend more time online, they are increasingly turning to the small screen on their mobile devices, presenting wireless carriers with an irresistible but tricky opportunity. According to a new statistic tracked by measurement firm comScore, as of August, the average Canadian spent almost 75 hours per month or 2.5 hours per day on the Internet, with close to half of that time consisting of watching Internet video and using mobile devices. Meanwhile, about 4 per cent of the 27.8 million Canadian Internet users are now relying on mobile devices exclusively to go online, comScore reported last month. It may be a small percentage, but it works out to about 1.3 million people eschewing home computers and relying totally on wireless services for Internet access. Consumers are also migrating to new devices such as the larger iPhone 6, which can drive mobile data consumption in a number of ways. According to mobile usage tracker Mobidia Technology Inc., large smartphone screen sizes tend to correlate to increased data use. For wireless carriers these trends present opportunities and challenges. It's appealing because revenue from wireless data is a growth engine for carriers - for example BCE Inc."s data revenue grew 24 per cent in the third quarter - but exploding mobile Internet use means carriers must carefully manage their networks in the face of a finite supply of cellular airwaves, known as spectrum. Plus, new entrants with ample spectrum compared to their relatively few customers are likely to try to win market share through aggressive, low pricing on data, which could force Canada's Big Three carriers to lower their per-unit prices on wireless data, said Greg MacDonald, head of research at Macquarie Capital Markets. Barclays Capital telecom analyst Phillip Huang also noted that the current iPhone upgrade cycle is accelerating the adoption of LTE or fourth-generation service. And LTE users tend to consume twice as much data as those using older HSPA or 3G networks, he said in an October research report. In the face of this demand, carriers want to encourage their customers to use the Internet and watch video on their phones, but they also want to charge a premium for that use. Over the past year, Rogers, BCE's Bell Mobility and Telus have moved to all-in-one pricing for smartphone plans, which include features such as unlimited calling and texting across Canada, voicemail and call display, plus data that can be shared among multiple devices. Those plans tend to earn the carriers higher average revenue per user, Mr. Huang said, noting in October that a mid-tier, two-year smartphone plan that includes 2 gigabytes of data costs about $90 per month, compared with $75 per month a year earlier. He estimated average data use for smartphone customers of the Big Three carriers to be in the range of 1.2 GB to 1.7 GB per month. "The wireless competitive environment has been more stable and rational than we have seen in years," Mr. Huang wrote. "Rational" is the industry's term for pricing strategies that do not aggressively seek to undercut competitors. But the pricing dynamic in Quebec shows that could change. Quebecor Inc."s four-year-old Videotron Ltd. wireless division is gaining market share in the province, offering lower prices for large data plans. The division's CEO Manon Brouillette said in a September interview that Videotron's most popular plan includes a significant 6 GB of data for $80. Desjardins Capital Markets analyst Maher Yaghi said last week the Big Three charge about $10 to $15 less per month for smartphone plans in Quebec than they do in Ontario. Mr. MacDonald said that pressure could extend to other markets if faced with the emergence of a consolidated fourth carrier that could include some combination of Quebecor, the newly recapitalized Wind Mobile and Mobilicity - which is under creditor protection but still has spectrum holdings in Ontario, British Columbia and Alberta. If that happens, he predicted the fourth player would follow a strategy employed by TMobile U.S. Inc. to offer low pricing on large data packages, which ultimately forced the biggest U.S. players to lower their data pricing. "At some point in the near term, rationality on data pricing within the Canadian market will dissipate - it's because there would be a lot of spectrum in the hands of a player that has every incentive to offer lower prices for higher data caps," Mr. MacDonald said.