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Finally, Cheaper Rates! Canada Opens the Telecom Market; Wind Mobile Boycotts

Image: Mashable

On Wednesday, Ottawa liberalized the telecommunications market, opening up the door to foreign ownership and smaller players – a move that will drive rates down, and boost competition for the Canadian telecom industry.

The Harper government voted to lift restrictions on wireless, Internet and phone companies that currently hold less than 10 per cent of the market share of the $18-bln telecom sector. Lifting the ban means introducing major financial interests, and international operators to the until now closed domestic industry.
It will also allow for increased competition, and allows U.S. wireless giants such as AT&T and Verizon, to move north of the border. Currently, Canada’s wireless market is dominated by Rogers, Bell, and to a lesser degree, Telus. Experts have condemned Canada’s previously non-competitive cell phone market, and hope that the lifted restrictions will help make rates less expensive for customers.

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Industry Minister Christian Paradis said the government plans to auction off parts of the increasingly valuable 700 MHz wireless spectrum for as much as $4-bln. This airspace allows broadcasters to attain much-wider reception across the country, making it an ideal investment for mobile broadband distribution; providing wireless companies with enough bandwidth to build increasingly advanced networks.

This low frequency travels longer distances, making it even more attractive for new or existing companies looking to expand their Canadian networks.

However, the change has left smaller carriers such as Wind out in the cold. Wind executive Anthony Lacavera says his carrier will likely boycott this spectrum sale. According to Lacavera, the revised mobile structure will not allow enough MHz to be secured to ensure profitably compete with dominant players within the available market shares. That is, these new allowances may make it harder for the Wind network to secure enough sky to provide quality, competitive service for its customers.

Mobilicity, another small carrier, has no plans to protest against this spectrum auction.

“It’s good news for the Canadian wireless consumer, that’s for sure,” said Stewart Lyons, Mobilicity’s chief operating officer to the Financial Post. “It’s a real strong indication of their (the government’s) commitment to maintaining a competitive environment, which means lower prices, greater availability of technology, proliferation of devices.”


Joanna Adams writes the Morning Cable, and lots more, for Toronto Standard. Follow her on Twitter at ‏ @nowstarringTO.

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