All eyes on Cogeco after CRTC’s wireless ruling

All eyes are on Cogeco Inc. following a decision issued last week by Canada’s telecommunications regulator meant to encourage more competition in the wireless market.

In the long-awaited ruling, the Canadian Radio-television and Telecommunications Commission (CRTC) stated it will mandate that the country’s large wireless incumbents — Rogers Communications Inc., BCE Inc. and Telus Corp. — plus the smaller SaskTel, give regional providers that invest in spectrum and infrastructure wholesale access to their networks for seven years.

Analysts have pointed out the language surrounding the CRTC’s decision lacks clarity on whether Cogeco will be eligible for wholesale access to national networks, as the regulator’s decision mandates access for facilities-based operators, which means companies that have their own network infrastructure already.

“It is unclear to us whether Cogeco with its current spectrum ownership … is eligible to gain network access under the facilities-based MVNO framework,” Royal Bank of Canada analyst Drew McReynolds wrote in a Friday morning note.

The Montreal-based company is the secondlargest cable provider in Quebec and Ontario, with 3.9 million customers. It holds wireless spectrum — the airwaves that transmit wireless service — but does not have wireless infrastructure, such as towers, to develop its own mobile service.

Cogeco has said it wants to enter the wireless market but has held off due to the price incumbents demand to rent network access.

“We’ve been trying for years to partner with them,” CEO Philippe Jetté said in March.

“They don’t want anyone else in the ecosystem. They would like to keep it closed.”

The company issued a statement Friday afternoon that called the new regulations an “important step.”

Vidéotron, Eastlink and Xplornet — with their existing network infrastructure — also stand to benefit from the CRTC’s ruling and could potentially expand.