Bains gets green light to cut cellphone prices or boost competition
Prime Minister Justin Trudeau signalled Friday that his government is ready to take aggressive action to force more competition for cellphone service in Canada.
In his mandate letter to Innovation Science and Industry Minister Navdeep Bains, Trudeau said that the government is committed to building more competition through mobile virtual network operators (MVNOS).
An MVNO is the cellphone equivalent of the small internet service providers who buy access to the big telecom networks at wholesale rates and then sell internet service to customers.
In February of this year, Canadian Radio-television and Telecommunications Commission (CRTC) announced a regulatory proceeding to look at the issue of MVNOS.
“It is the Commission’s preliminary view that it would be appropriate to mandate that the national wireless carriers provide wholesale MVNO access as an outcome of this proceeding,” the CRTC said last February. “The Commission
considers that, on balance, it is likely that the benefits that a well-developed MVNO market would deliver to Canadians are now more likely to outweigh any negative impacts that a policy of mandated wholesale MVNO access might have on wireless carriers’ network investments, particularly given the extensive investments that have been made in recent years.”
During the fall election campaign, the Liberals promised to lower cellphone bills by 25 per cent, and in the Throne Speech last week, the government doubled-down on that promise.
“If within two years this price target is not achieved, you can expand MVNO qualifying rules and the Canadian Radio-television and Telecommunications Commission mandate on affordable pricing,” Trudeau’s letter to Bains said.
Bains would not answer questions from the Financial Post on Friday.
Already, independent ISPS are eager to become cellphone service providers, just as soon as the CRTC creates rules that will allow them to get in the game.
“About half of what Canadians spend on their telecommunications services is wireless, and we’d like to continue to bring the competitive services that we offer on the wire-line side to wireless,” said Matt Stein, CEO of Toronto-based Distributel.
He said the signal the government is sending is optimistic.
“That tells me they’re expecting things within two years,” Stein said. “I read urgency in this.”
Janet Lo, vice-president of privacy and consumer legal affairs at Teksavvy, said that her company will also jump into wireless service, just as soon as there’s a regulatory framework forcing the big telecoms to offer wholesale access to their networks.
“We hear every day our customers asking us if we can be their cellphone provider,” Lo said.
The Canada Wireless Telecommunications Association, however pointed out that prices are already dropping, and said “vigorous competition” among the big three telcos is the reason.
The CWTA, which includes Rogers Communications Inc. and BCE Inc. as members, said that introducing MVNOS into the market could actually be a bad thing, given that carriers are investing billions in their networks every year.
“Government action mandating MVNOS could put this at risk, put Canada behind on 5G, and harm investment in services to Canadians, especially those in rural communities,” Robert Ghiz, president and chief executive of the CWTA, said in an emailed statement.