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Ottawa to Allow Foreign Ownership of Wireless Companies

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The federal government has made a huge announcement this afternoon, as they have made changes to allow foreign ownership of wireless companies in Canada, with an upcoming change to the Telecommunications Act, as announced by Industry Minister Christian Paradis. This will allow smaller companies gain access to more capital to grow and compete:

The federal government is opening the door to more foreign ownership of wireless companies, a move that would allow non-Canadians to own 100 per cent of firms with a market share of 10 per cent or less.

It says this exemption from foreign investment restrictions would continue even if these companies grow naturally to occupy more than 10 per cent of the market, but would not if these firms get bigger through mergers or takeovers.

As you can expect, this will allow smaller wireless companies such as Mobilicity and Wind have a real chance to take a real bite of the ‘Big 3’s’ wireless share. Mobilicity CEO Stewart Lyons had this to say, which really hit the nail on the head:

“I think the government is committed to breaking up the oligopoly and creating some competition,” Stewart Lyons, Mobilicity’s president and chief operating officer said in an interview. “I mean, it’s a fact we had stuff like system access fees and low usage in this country. It’s a fact that we never had unlimited long-distance plans until now. These things are all objective facts. And how they’re all gone by the wayside now thanks to competition. The government obviously sees that. They see happy consumers, and greater proliferation of technology, and that’s their mandate – that’s their job.”

Ottawa also announced some new measures for the upcoming 700MHz auction set to take place in 2013. Spectrum will not be set aside for new companies as lobbied previously by smaller entrants like Wind, but rather a limit will be put on purchases by the incumbents, effectively reserving 25 percent of prime spectrum for new entrants or providers.

This is a fantastic move made by the Federal Government, as these changes will only benefit consumers. Many are fed up with the endless array of fees and expensive voice and data plans offered by the ‘Big 3’, and the hope is these changes will allow smaller entrants to offer real competition.

What are your thoughts to these new changes?

[via The Globe and Mail]

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  • Fbarbat

    Whoao….
    Was about time.

  • That’s what she said. But really, this is awesome news!

  • Anonymous

    Awesome. Setting aside spectrum, even if indirectly is a plus as well.

  • Anonymous

    About time! I have been waiting for this for years!
    Hopefully they will abolish the anti competitive CRTC while they are at it!

  • Really

    Everyone whines about expensive Data plans…

    Had anybody looked at plans south of us? 30$ for 6 gigs is a steal of a deal

  • Definingsound

    I admire the work that Canadians have performed while working for Bell, Telus and Rogers. These three companies are all very good employers. I cannot say the same of Wind or any other foreign wireless carrier.

    Wireless carriers: Canada 8, USA 8

    Large wireless carriers: Canada 3, USA 4 (>10% of domestic market)

    Potential wireless subscribers: Canada 30 million, USA 300 million

    Canada already has enough carriers, as many carriers as the USA. Our southern neighbours are capable of maintaining a competitive landscape, with far fewer carriers-per-subcriber. Clearly, Canada has enough carriers already, when comparing our national market to that of the USA. Inviting foreign firms to compete on our soil without domestic financing requirements could prove to be a grave mistake. The Conservative government spends too much time admiring the number of jobs they create, and not enough time creating high paying jobs.

    Inviting foreign carriers to compete may allow Canadians to benefit in the short term (by paying slightly less for mobile phone coverage), but I believe that Canadians will lose in the long term (the highest paying jobs at carriers will be outside Canada).

  • Anonymous

    This is good news. But if the smaller guys don’t get the iPhone or the latest hottest devices then they will still struggle to the Big 3.

    These rules have been rumored for YEARS now. We will see how much competition we can bring from this.

  • Anonymous

    What have the Big Three done for Candians to warrant their oligopoly?

    Worlds highest prices?
    Worlds highest profit margins?

    It seems they take more than they give. If these guys were competitive on pricing they would have anything to worry about and this wouldn’t be an issue. Clearly Candians have spoken and finally the government has listen. Clearly you’re a lefty socialist that wants to take a positive and swing it into a negative for any possible way to slight the conservative government … Sad really.

  • Anonymous

    The 6 gig plan is temporary and the carries try anything to get people off of it. I just had a rep call me up and offer me all kinds of great plans but I would have to give the 6 gig plan. The regular plan is either 500mb for $25 or 1gb for $30 … Not such a good plan is it?

  • No more Rogers

    Its about bloody time. Good riddence to Rogers and their internet throttling.

  • john28998

     When the 6GB for $30 is as available as it is, it can’t be called temporary. I’m on that and love it, and even if they “try anything to get people off of it” (seen no proof of this at all), it’s all optional and you never have to switch off.

  • Anonymous

    Ditto……about fracking time!

  • Worried

    Very thoughtful and patriotic post. I was immediately struck by similar concerns when I read this news.

    It’s too bad most Canadians have got used to thinking only with their wallets. Sure, there are limits to patriotism: I wouldn’t give up my iPhone for a Blackberry because user experience is so different. But would I sign up with a foreign owned provider to save $10 a month ? No way! It’s sad enough that what’s left of the mighty Hudson’s Bay Company is now foreign owned. Let’s not do the same to our telecom industry.

  • Jason_Neil

     Prices are not everything. At least I know the Canadian wireless company, Fido (which is owned by Rogers), that I am with have employees based in Canada. When I call customer service, I know they lived in Canada. Unlike some other companies which have their employees and call centers in some third world countries.

    I will never use a service that doesn’t have most if not all of the employees based in Canada. Think about it. We might be saving a few dollars a month in our wallets. But in the end, we are digging our own graves by not creating jobs in Canada.

  • pure4

    Yeah let’s have the big three provide a few more Canadian jobs and gouge the rest of the country out of their hard earned cash.  If they weren’t so god damn greedy the general populations would not be lobbying the federal government for relief.  I’m tired of being taken advantage of by the big three… FINALLY they’re getting what’s coming to them.. Any you working for them, big deal, find another job!  It’s bastards like you that helped the big three gauge the customer by talking them into long term 3 year contracts.. I say bring on the foreign owned, foreign employing companies.. I’d rather talk to Ahbar from India than have to hear from you! ((END RANT))

  • Junkmailinu

    F YOU!

  • Anonymous

    Do you guys really think the Big 3 won’t do anything about this? Let’s just wait. Competitions usually bring benefits to the end users

  • Anonymous

    I partially agree with you. Canada has enough carriers. Open the market to foriegn investors will not solve the problem. Do you really think the big 3s really care about it? Wind Mobile and Mobilicity have been up for a while. Has anyone seen changes? How many towers they have to build in order to compete with these big 3s? Their reception sucks, service sucks, and the coverage is the worst. Who cares if I will get unlimited calling with only $25? When there is no reception to use the phone, the $25 is waste of money. Oh, the “tab” is much worst than contract. Unless you sign up a big monthly plan, otherwise it will normally takes you more than 4 years to clear it.

    Canadian has problem with the government interfering the private sectors, however, the government should jump in when it’s gone out of control. I believe the citizens will welcome it (well, at least most of them including me).

  • Anonymous

    As you mentioned Fido is owned by Rogers … Sad to say Rogers has plenty call centres in India … Almost all the products you buy each day is made outside Canada … Sorry to say your ideology is flawed at best.

  • Anonymous

    Do you shop at Walmart? Home Depot? McDonalds? Burger King? Sears? Subway? Have I made my point yet?

  • Anonymous

    Of course you don’t have to switch but all their new plans that are competitive have data built in that can not be seperated from the voice. They’ll never admit they want people off it. Its not avialable as often as you perceive it to be.

  • TonyC

    People don’t realize although competitions are good, they are not doing anything to end users the customers except pricing.

    I rather look for better service than pure pricing. The new comers are not building any new tower or bringing any better service to us. Not only that, since the “Big 3” need to compete with new comers, they are not building better service as quick as before. (well Canada is known for slow tech anyways)

  • Gcostanza

    Good. We need to get rid of the USSR type laws.

  • Gcostanza

    Free markets always win over government control

  • Kellie Inkster

    I’ve gotten multiple calls for “family plans” offers which would end up downgrading my services while still costing me the same. After I pointed that  out, she didn’t have much to say.

  • Definingsound

    My position is that the domestic carriers need incentives that foster competition between themselves, and that foreign-owned carriers in Canada’s market are both not necessary nor desireable.
    National-level telecom companies are a relatively new change to the Canadian business landscape. I believe that the remaining oligopolist behaviour of Canadian carriers, is leftover from the legacy of provincial telecom. The current situation of our wireless market, is much more competitive than the telephone industry was in the 1980’s (Bell was absolutely rolling in money using a monopolistic pricing model). As the domestic carriers become more diffused into all the regional markets across Canada, we see competition beginning to thrive.
    Already there are ways to avoid using cellphones. If you (as a Canadian) don’t like paying for mobile phone service, then:
    – buy a data-only plan
    – use Dell Voice (Canadian phone number, 911 service)
    – and STOP PAYING the mobile carriers for phone service
    Vote with your wallet! Money in a free market is faster to achieve real change than any government regulator on earth!

  • Anonymous

    Essentially you’re saying we should change our ways in order to circumvent their greed and effectively forcing them to change …. Why should we have to change our ways?

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