COGECO CALLING

Cable company hints at wireless opportunity.

Cogeco Inc. has a grand vision for increasing wireless competition in Canada — and if it gets its way, the cable and media company is interested in entering the market.

During a conference call Thursday, Louis Audet, president and CEO of Montreal-based Cogeco, outlined the company’s detailed proposals for changes to wireless regulations that it plans to present at next week’s hearing in Gatineau, Que. Mr. Audet said if the Canadian Radio-television and Telecommunications Commission implements its proposals, Cogeco would consider offering its own mobile wireless services, focusing on areas where it already provides cable.

Cogeco’s suggestion is that the CRTC require the Big Three national wireless providers to let small carriers use their radio networks for a standard fee — a proposal that would be a radical change from how the commission currently regulates the industry. Mr. Audet said the regulations need that change to encourage new entrants.

“Consumers would benefit from a number of alternative creative services that do not exist today,” he said. “It’s been an uphill battle.”

Next week, the CRTC will hold a hearing to investigate the state of competition in the wireless market. If the commission decides it’s not competitive enough, it will consider what actions it should take to change that.

Cogeco’s proposal sits at the extreme end of the CRTC’s options for increasing wireless competition. Desjardins Securities analyst Maher Yaghi said the upside of forcing the big telecom companies to let upstarts use their networks and infrastructure at a discount would be more consumer choice and lower prices, but the downside could be lower profits and worse network quality.

“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,” Mr. Yaghi said. “The consumer will not be served as well because the service will not be good enough.”

A CRTC report on the state of the telecommunications industry released Thursday shows the growing importance of mobile wireless communication in Canada. According to the report, about two-thirds of Canadians now own a smartphone or a tablet, a major increase from 2012 when only half of Canadians owned a mobile device.

Despite efforts by the Conservative government to encourage competition, the wireless market continues to be dominated by Rogers Communications Inc., BCE Inc. and Telus Corp. Smaller competitors control just 8% of the market, up from 6% in 2012, according to the report.

The Conservatives have been trying to encourage the entry of a fourth national wireless carrier, rather than the marketplace of many small carriers piggybacking on the incumbents’ networks that Cogeco envisions. Quebecor Inc. has declared its interest in becoming a fourth carrier, but currently it only provides wireless services to Quebec customers through its subsidiary Videotron.

That’s why wholesale mobile wireless roaming rates, or what one carrier bills another to let customers use its network, are going to be the hot topic of discussion in Gatineau next week. Before making the large investment necessary to become a national wireless provider, Quebecor has said it wants to be sure it won’t have to pay punitive rates when its customers go out of range of its cell towers and onto rivals’ networks.

The hearing will run from Monday to Friday next week.