Canada Plan to Increase Telecom Competition Runs Into Weak Signals

The Canadian Radio-television and Telecommunications Commission (CRTC) announced on April 15 that the country’s ‘Big 3’ telecommunication companies will be mandated to give smaller regional operators access to their networks. These smaller companies would be considered mobile virtual network operators (MVNOs) and buy wholesale access to these networks and resell it. The CRTC aim here is to increase competition in the Canadian telecom market through these MVNOs. However, the criteria laid down for these MVNOs has put a question mark on the success of this plan.

Dominant Networks

The focus is on distributing networks from the ‘Big 3’ – Bell, Rogers and Telus – but the CRTC has also incorporated regional network provider SaskTel as a dominant network provider in Saskatchewan. The CRTC outlines that the wireless carriers will be able to sell their networks to MVNOs based on the following provincial distribution:

  • Bell, Rogers and Telus in all areas except Saskatchewan and the territories
  • SaskTel in Saskatchewan
  • Bell Mobility in the three territories of Yukon, NWT and Nunavut

The layout of where these networks can be sold has been made clear, but the CRTC has not outlined any mandated pricing or rates at which the networks can be sold to the MVNOs.

Qualification for MVNOs

The CTRC has laid out some criteria for the prospective MVNOs. The major qualification needed here is that these regional companies must have existing Canadian networks. This complicates the definition of what a true MVNO would be in Canada, as in the normal course an MVNO has no previous infrastructure of its own. With the CRTC granting access to companies which have already contributed to the development of competition in the Canadian market, the eligible regional companies would be:

  • Eastlink
  • Videotron
  • Xplornet
  • Ice Wireless
  • TBayTel

The announcement of this MVNO mandate has come days

after the deadline for the bid to participate in the 3500MHz spectrum auction in mid-June.

Timelines

The CRTC will play an active role in mandating the wholesale MVNO access service for seven years to encourage individual MVNOs to build their own network. The national carriers must also give the CRTC a breakdown of their plans and updates on the progress to lower-cost and introduction of occasional-use plans every six months.

However, considering that the CRTC intends to improve the level of competition in the Canadian market, the latest move seems to be only a baby step where a giant leap is needed. This mandate states that it will be targeted towards helping MVNOs introduce competition. But if these regional companies already must have their own spectrums, are they really MVNOs? The power is still left to the national carriers to decide the rates at which they will sell these network shares, and it is safe to assume they will not be willing to lose money over this mandate.