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Can Canada Support Four Wireless Carriers Long Term?

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Canadian Telecom Summit

The condition for wireless innovation and lower prices is the presence of a fourth player: that’s the position of the federal government. But the telecom sector tends to disagree with this position – just consider Rogers’ Guy Laurence recent statement. However, besides the media war between the two parties there has been no public debate on the vitality of any of the aforementioned points of view (via the Leader Post).

This is about to change with this year’s Canadian Telecom Summit. Hot on the heels of the debate over capping wholesale roaming rates, the organizers, Mark H. Goldberg & Associates Inc. & NBI/Michael Sone Associates Inc., have carefully put together a three-day program allowing rivals to showcase their positions.

“On one hand, you might have lower prices. On the other hand, you may have reduced incentives to invest in new technology,” says Mark Goldberg, who helped create the annual conference as a forum for the billion-dollar industry of smartphones, telephones, Internet and other vital communications.

But this is only one part of the conference. Besides telco representatives, academics and other economists will debate whether governments can actually foster competition through regulatory policies.

One of the panelists for today is Robert Crandall, a fellow of the Washington-based Brookings Institution, who says there are only a few areas with very high population densities that can sustain more than three wireless players in the long term.

His position somewhat coincides with Rogers’. The company CEO, Guy Laurence, stated earlier last month that there was no room for a fourth player. Fact is, we only have to look in the neighborhood to see that he could be right: in the US there are four major players, but two of them are preparing a merger. I’m referring to Sprint and T-Mobile, which decided to unite their powers to compete with AT&T and Verizon.

Industry Minister James Moore is on record as saying that the government’s wireless policy is “designed to benefit Canadian consumers, first and foremost.”

He has also said after the latest spectrum auction was conducted this year that Canadians “will soon benefit from a fourth wireless player in every region of the country having access to this highquality spectrum to provide all Canadians with dependable, high-speed wireless services on the latest technologies.”

On the other hand, there is Wind Mobile: although we must note that it depends on its financial backer, it has recently posted its best quarter ever, and it’s still growing. But it depends on its rivals’ networks outside its coverage. Catch 22.

So, in the end, can the Canadian mobile landscape support a fourth wireless carrier? This will be a hot topic from June 16 to June 18th, and we’ll keep you posted.

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  • Maybe. But if it’s the case, Videotron has to merge with Wind and/or Mobilicity. Only to get their customer base.

    Wind/Mobilicity/Videotron can’t grow without LTE, well, I think.
    If they’re not able to quickly deploy the LTE, they will be far away behind the big three, who are soon going to deploy the VoLTE!

    I want to pay less. But I’m not ready to give up on my network coverage/network quality for this.

  • 1His_Nibs1

    Umm….isn’t it Sprint & T-Mobile & not Spring & T-Mobile? I guess proof reading isn’t in vogue anymore.

  • It’s been fixed, thanks. We’re going to go cry now.

  • Gord

    How is it that only Wind can offer unlimited US data/voice at a great price? The big 3 are a crooked cabal with an oligarchistic penchant for mauling consumers.

  • Fireeast

    Personally I only see three possible options, raise the foreign investment threshold, buy and merge all entrants and possibly the provincial players and force a forth player. (government owned but run similar to provincial counterparts) or forcefully take over big three assets and rent space back to them. (allowing more players because they have no huge capital expense.)

  • Max Power

    Rogers wins spectrum auction, sets new plan minimum at $80/month. Enough said.

  • We have one of the lowest population densities in the world, and quite possibly the highest cost of network infrastructure per capita. I think it’s already hard enough for the existing telcos to compete with such a low amount of users per tower. Adding a fourth competitor would make that worse.

    Wind can offer the prices they do because they only service high-density areas.

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