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WIND: New Telcom Foreign Ownership Changes Are Just an ‘Illusion’

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Yesterday the Federal Government announced changes to foreign ownership rules of telecoms in Canada and noted details about the upcoming 700MHz spectrum auction. Feedback to the news has been mixed from newer entrants such as Wind and Mobilicity.

Wind Mobile CEO Anthony Lacavera thinks the rules don’t really change anything, but continue to protect the ‘Big 3’ and what was announced just created an ‘illusion’:

“The reality is that consumers will face higher prices, fewer choices and a return to the era of incumbent dominated wireless…

…The announcement creates the illusion that the government has gone all-in to create a competitive wireless landscape, when they’ve only done half the job…

…The government is prepared to take credit for creating a level playing field in the upcoming auction, when all they’ve really done is stack the deck in favour of the incumbents…

…To build out an LTE network, 10 MHz of spectrum is necessary. This decision only allows new entrants access to half that amount and will prevent any carriers, other than the incumbents, from building faster networks and keeping up with the increased consumer demand for the best available smartphone technology…

…Delivering on foreign ownership is only half of the equation. We’ve spent countless months telling the government that caps will destroy our ability to compete with the incumbents in the next auction, thereby crippling wireless competition in Canada…”

Lacavera has a point, but Wind Mobile also has some of the biggest funding behind them, Russia’s VimpelCom (they acquired Egypt-based Orascom, which owns Wind), so clearly they want to ensure their money is being put to good use.

On the other hand, Mobilicity applauded the new changes:

“While we recognize a compromise has been made,” CEO Stewart Lyons said in a statement, “we are confident that competition will continue for the betterment of Canadian consumers.”

Lyons goes on to mention Mobilicity will ‘be a force to be reckoned with in that auction’, in reference to the upcoming 2013 date for the 700MHz spectrum bidding. They have already received funding offers to help them compete in the process.

Another important announcement yesterday was the introduction of a ‘use-it-or-lose-it’ clause, which ensures wireless carriers actually implement their purchased spectrum, instead of hoarding it and sitting on it. Shaw purchased a chunk of spectrum back in 2008, but its plans of launching a wireless service fizzled, leaving their spectrum idle.

It’s too early to tell if these announcements will make a real difference in the prices of what we pay for wireless, but it is definitely a step in the right direction. The numbers won’t lie. What do you think?

[via CBC]

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  • john28998

    It really looks like Wind wants EVERYTHING to favour them. Sorry but it doesn’t work that way, the big 3 are the ones investing heavily in their LTE networks, spending billions of dollars on building their networks for better urban (as well as rural) coverage and for faster speeds.

    If Wind showed a commitment to spending that kind of money and building their networks, then an argument could be made to provide slightly more spectrum to the smaller players — however, look at all the players from the last auction who just bought and sat on it (ex, Shaw). That is spectrum that anybody else could have used to actually benefit consumers

  • Mark Morissette

    You know, I’m all for supporting the new entrants, but Wind is starting to come across as a bit of a crybaby.  Seriously – they came into Canada knowing ahead of time that the incumbents owned nearly 100% of the market, they knew the rules, they knew it wasn’t going to be easy…yet it seems that for the last 6 months all they’ve done is cry about all of it.

  • They have the deepest pockets, sounds like they’ll do anything now to get into the spotlight.

  • john28998

    The funny part of this is back in Egypt, where Wind’s parent company is located, 2 out of the 3 carriers have >81% of the market. So Wind is used to a market with a less competitive structure than here (and the argument could be made that with the vast land mass in Canada to cover, it may not be able to support more than 3-5 carriers).

    They are starting to go a little overboard though — they know what they got into, now try to make it work (if you want to). Complaining that much won’t help…

  • Definingsound

    My favourite new quote: “Whining is contagious”. WIND started the whining (at the CEO level no less) at the last auction, and hasn’t let up since.

  • Vinim12

    Being a Canadian, I love paying high taxes and less competition.  I hope Wind / Mobilicity shut down their operations and sell out to the big 3.  Then, the big 3 can increase their 3 year plans to 5 years, as well as increasing their monthly plan rates.

  • Anonymous

    Wind do you want the government to hold your hand? I’m all for competition, but come on did wind come into this market blindfolded or just want special treatment. 

  • Anonymous

    Since Wind/new entrants showed up, our prices on average have fallen $10/month. I’m pro wind, pro competition and anti big-3. Unless you all love paying out the ass for service, I suggest you do the same. The CRTC babies the big 3, Wind just wants to suck the tit too.

  • Anon

    Sweet!  I’m looking forward to the day when Robbers/Helus/Hell eliminate the competition and they roll out the 5+ year contracts the cheap $200+ monthly payment plans.

  • Kraken

    No, they knew it wasn’t going to be easy.  What they didn’t know was that it was going to be impossible.  Think of David armed with a tiny pebble vs 3 x Goliaths,

  • appelle

     You are forgetting a very important fact: The big three were given and still retain monopolies in certain markets, given to them years ago by the government for free, which is the only reason they because so big and powerful. The new entrants were never given this. So, the government should really put in rules that now favour the new entrants. But then, we know how the big three grease the palms of politicians, now don’t we.

  • Money talks, and Rogers/Bell have been bribing the political class forever. Nothing will change.

  • Big 3 suks

    you are fuking retard…we dont earn free money like u fuking bastard

  • Edumacated!

    Someone doesn’t grasp the concept of sarcasm?   BIG 3 SUKS, try looking in the dictionary for the definition.  Your post really makes you look stupid.

  • ronman

    There do seem to be some groups lobbying for the cell phone user. We need to put the politicians’ feet to the fire–by promising to vote for the party that promises to open the market to sustainable competitors and require the big 3 to bulk lease space on their networks to competitors. 

    The big 3 have profit margins normally achieved only with a mask and a gun. We need to know their contributions to the political parties and individuals. No one can claim the big 3 need protection against competion–it’s us that need the protection.

  • DefiningSound

    ??? Telus 2011 Q4 was profits of $237 million on revenue of $2.7 billion. Less than 9% profit margin. At less than 10% profit margin, I cannot agree that the evil Big 3 are achieving monopoly profits.  That’s not anywhere near the profits of the device maker named Apple;
    posted
    2012 Q2 profits of $11.6 billion on revenue of $39.2 billion (about 30% profit margin).

    So if we were to follow this “profit based” witch hunt for evil monopolists, we would have to demand that certain device-makers (Apple) lower their dealer hardware prices, as the dealer network (the evil Big 3 in Canada) are actually creating the profits of Apple, in part by using contracts to hide/subsidizing the phone hardware we use on the evil Big 3 networks.

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