Invite in new cell firms: study

‘Mavericks’ would bring better service

A researcher from Carleton University has released a new study saying Canada should entice “maverick” cellular firms to set up within its borders to better service Canadians.

The report comes hot on the heels of new commercials from the federal government calling for more competition in Canada’s wireless sector.

The report, authored by Dwayne Winseck, a professor in the school of journalism and communication at Carleton University, says more than 90 per cent of the wireless spectrum in use in Canada (airwaves through which cellular signals travel) is being used by three companies — Rogers Communications, Bell and Telus.

‘In Canada the circles involved in discussing wireless issues are exceedingly small.’

DWAYNE WINSECK

Carleton University

In his 60-page study on the state of the market, Winseck argues the government must make it easier for competing and more nimble firms to come into Canada, even if it means forcing Canada’s three main incumbents to give up some of the spectrum they currently own.

By employing methods used by places such as the U.K., the U.S., Israel and France, Canada can improve competition in the wireless sector while increasing services available to Canadians and decreasing costs, according to the study. Winseck said when two of the U.K.’s largest cellular telephone companies wanted to merge, the government forced the new firm to give up 25 per cent of its spectrum to a company with less market share.

He also said another approach to encouraging competition in France saw government departments regulate wireless prices and set minimum technical standards for incumbents. The move led to fierce competition among the country’s existing wireless companies, which had to compete based on service offerings and speed instead of just price.

“The study challenges the industry’s claim that there is no competition problem in Canada,” Winseck said. “This, however, is symptomatic of a bigger problem, namely that in Canada the circles involved in discussing wireless issues are exceedingly small and they like to hear the sound of one another’s voices. Their members do not look kindly on those who might rock the tight oligopoly that has ruled the industry from the get-go.”

The study comes hot on the heels of an attempt by American cellular giant Verizon Communications Inc. to enter the Canadian wireless market this summer. The move was harshly opposed by the country’s incumbent carriers: Telus, BCE Inc. and Rogers Communications Inc., who launched a public-relations campaign in protest of the government’s policies on the industry including the bidding rules for the upcoming spectrum auction.

In the wake of that debate, the federal government has turned its attention towards the industry with the intention of making it more competitive.

The government has gone so far as to run ads on TV claiming that Canadians pay too much for cellular services and are being underserved by the current players in the market.