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?