Canada Competition Bureau

Depending on CRTC’s Rulings, Cogeco May Become a Wireless Carrier

September 29, 2014 - Written By Cory McNutt

The wireless carrier situation in Canada is like a daytime soap opera – on one side we have the Big Three carriers and on the other side we have the many small regional carriers and smack in the middle we have the Canadian Government.  The Government claims that their main job is to try to increase competition and as a result, the prices will come down so that subscribers don’t have to pay so much.  However, to the Big Three, the Government has done everything it can to make business difficult for them – slanting the spectrum auctions to favor the smaller carriers and requiring them to charge the smaller carriers less for roaming charges…no more than they charge their own customers. But despite all of the efforts made by the Conservatives, the Big Three – Rogers, Bell and Telus – are still dominating the market…the smaller competitors control only 8-percent (up from 6-percent in 2012).

Now there is a real chance that the Government will require the Big Three to allow the smaller carriers to use their networks for a standard fee.  The Canadian Radio-television and Telecommunications Commission (CRTC) hearing will have discussions next week, Monday through Friday –  The  Competition Bureau, Cogeco and Globalive Wireless Management Corp (Wind Mobile) will all be on the agenda. Cogeco chief executive Louis Audet wants the Government to allow Mobile Virtual Network Operators (MVNOs) to ‘piggyback’ on the major networks – he is going to outline a detailed proposal for changes to the wireless regulations that could forever change the landscape of Canada’s wireless industry.  Mr. Audet said, “Consumers would benefit from a number of alternative creative services that do not exist today.  It’s been an uphill battle.” While this may increase competition and give the consumer more choices and lower prices, it could also lower profits and worsen the network quality.  Desjardins Securities analyst Maher Yaghi said, “It’s like a pendulum… if you swing it towards the consumer side and you lose all the profitability of the private companies, eventually over a few years, they’ll stop investing and the quality of the network will degrade.  The consumer will not be served as well because the service will not be good enough.”

It should come as no surprise that the telecos are not happy with Mr. Audet’s proposal, as they have invested billions in their infrastructure and they are not happy about allowing others to use it a discounted rate.  In its submission, Bell said, “If the right balance is not struck, and regulation goes too far, there is a real risk that investments will be dampened and Canada’s status as a wireless world leader will be threatened.”  In other words, if we do not get a fair return on our investment, then they will not have the money to expand and improve their network. Please hit us up on our Google+ Page and let us know if you think this is a good idea…can you understand the concern of the major carriers and is it fair for the Government to force them to ‘rent’ their networks…as always, we would love to hear from you.