Lower bills for wireless

Canada’s Big Three wireless companies (Bell, Rogers and Telus) have a stranglehold on the market in most parts of the country.

They enjoy higher profit margins than wireless operators in other comparable countries, and invest a smaller portion of their revenue in their networks.

And, not surprisingly, Canadians pay higher cellphone bills than almost anywhere else.

This, in a nutshell, is the picture painted by the Competition Bureau of Canada in a new report that proposes ways to introduce more competition into the country’s wireless market and lower prices for everyone who relies on this vital service.

The Trudeau government, which is so devoted to “middle class prosperity” that it just appointed a minister with that very name in her title, should listen up.

Virtually every middle-class Canadian (and pretty much everyone else as well) is paying more than they should for wireless service, according to this report and many that have come before.

This isn’t inevitable. As the Competition Bureau lays out with admirable clarity, it’s due largely to the way the wireless market in this country has evolved. And government can do something about that.

As proof, the bureau notes that prices are 35 to 40 per cent lower in parts of Canada, such as Saskatchewan and Quebec, where other operators (so-called “wireless disruptors”) have a significant share of the market. That can add up to hundreds of dollars a year for a typical consumer.

There’s disagreement among the experts on the best way to tackle this problem.

Some advocate forcing the Big Three to provide smaller virtual competitors with more access to their national networks at “fair” prices. These mobile virtual network operators, or MVNOs, would be allowed to buy excess capacity on the Big Three networks and resell it to consumers, thereby putting downward pressure on prices.

The Canadian Radio-television and Telecommunications Commission (CRTC) is reviewing policy in this area, and last March it said its “preliminary view” is that giving the MVNOs more access is the way to go.

The Competition Bureau takes a somewhat different tack. It says the best solution is to encourage more “disruptors” to get into the market and build their own networks.

In the meantime, though, it says Bell, Rogers and Telus should be required to sell access on a temporary basis to regional carriers that plan to invest in their own networks. It says that would ensure investment continues and Canada enjoys high-quality wireless service.

Government and industry can debate the details of all this. But aside from the Big Three themselves, who have an obvious interest in maintaining the status quo, just about everyone agrees wireless prices in most of Canada are too high.

Certainly the Trudeau Liberals took that view during the recent election campaign. They promised to lower wireless prices by 25 per cent over the next four years to levels in line with other G7 countries, and said that would put “$1,000 back in the pockets of the average Canadian family every year.”

They were notably vague on how they planned to do this, though, promising to “work with” the telecoms to make it happen. But they did say they would encourage competition and “allow the CRTC to step in if that competition isn’t leading to lower prices.”

The government should make sure this promise is included in its upcoming Throne Speech. The CRTC will hold hearings on the issue in February, and the government should follow up quickly with action to make sure there is more competition in wireless services.

Canadians — including those “middle class” folks the government worries so much about — deserve a better deal than they’ve been getting.

Virtually every middle-class Canadian is paying more than they should