CRTC ruling a push toward lower-cost phone plans
The feds have issued new rules to bring down wireless costs, forcing large carriers including BCE Inc. and Rogers Communications Inc., to resell access to their networks to smaller players.
The decision by the federal telecommunications regulator makes it easier for regional telecommunications providers such as Quebecor Inc. and Cogeco Communications Inc. to compete on wireless plans with the sector's three dominant companies — Rogers, BCE and Telus Corp.
But only companies that own spectrum in Canada will be eligible to participate in the “mobile virtual network operator” framework, cutting out foreign players.
It applies for seven years, according to the decision released Thursday by the Canadian Radio-television and Telecommunications Commission.
Analysts said the decision carved a middle ground between the big carriers, which did not want forced MVNO access, and others who argued for a much less restrictive policy on wireless reselling.
“The decision will prevent truly disruptive entrants (like Google or Amazon) into the business,” BMO Capital Markets analyst Tim Casey said in a note.
CIBC analyst Robert Bek called it “a generally benign outcome for the Big 3” that won't change the competitive dynamic very much.
Wireless competition is a major point of debate after Rogers struck a deal to take over Shaw Communications Inc. in March for about $26 billion.
Shaw operates Freedom Mobile, the No. 4 wireless provider in much of the country.
Thursday's ruling by the CRTC, released after the market closed, “is a little bit negative for the big three wireless providers. However ... I think you have to look at the proposed Shaw-rogers merger right with it,” Matthew Dolgin, an equity analyst at Morningstar Inc., told BNN Bloomberg Television.
“We will be reviewing the decision and its implications to ensure they align with ... promoting competition, affordability, consumer interests and innovation,” Innovation Minister François-philippe Champagne said in a statement.
The CRTC ruling also pushes dominant carriers to sell lower-cost plans on their main brands.
By July, Bell, Telus and Rogers will be expected to offer monthly wireless plans for $35 that include three gigabytes of data, and offer cut-rate plans for people who don't use their phones often for $15 a month. The rules also apply to Saskatchewan Telecommunications Holding Corp., a government-owned telecom.