Mobile reseller access in the spotlight
Canada’s Big Three wireless players have market power, according to the federal competition watchdog. But even the Competition Bureau doesn’t want to open the floodgates for mobile service resellers to compete in Canada.
The question of whether to mandate mobile resellers — mobile virtual network operators (MVNOS) who don’t own physical networks but buy wholesale access to existing networks — took centre stage on Tuesday at the first day of a nine-day public hearing on the state of Canada’s wireless market.
The Canadian Radio-television and Telecommunications Commission, facing pressure after the Liberal government made a campaign promise to reduce cellphone bills by 25 per cent, must decide whether more regulation is needed to boost competition and lower prices in an industry dominated by three players: BCE Inc., Rogers Communications Inc. and Telus Corp.
Mobile resellers cost less to operate and typically offer cheaper services, so are viewed as one potential way to boost competition in a country in which mobile prices have historically been higher than its global peers. The perception of high prices remains even though data prices have dropped significantly in the past couple years.
Such resellers can technically negotiate access to networks under existing rules, but in practice the national network operators have not sold widespread access, as they prefer to directly make money from the networks they spent billions building. The Big Three are strongly opposed to mandated reseller access, arguing it would hurt their incentives to invest.
Newer regional players that offer relatively less expensive plans than the incumbents, including Shaw Communications Inc.’s Freedom Mobile and Quebecor Inc.’s Videotron, also oppose mandated resale access. They argue the new entrants would target their customers and harm their prospects after sinking billions into network expansion over the past five years.
The Competition Bureau argued the CRTC should not create broad rules that enable mobile virtual network operators, stating that such a move would hurt regional operators that it argues have been effective in reducing prices. Instead, the bureau said the telecom regulator should make it easier to compete for new entrants that own their facilities.
“The data suggests facilities-based competition is working,” said Anthony Durocher, the deputy commissioner of competition for the Bureau.