Earlier today, the Canadian federal government announced its plan to force Rogers, Telus and Bell to lower their wireless prices by 25% in two years.
Navdeep Bains, Minister of Innovation, Science and Industry (ISED), said the government will start tracking the price of mid-range plans with 2GB to 6GB data, to ensure a 25% price reduction happens in 24 months. If it doesn’t happen, the government will “take action with other regulatory tools to further increase competition and help reduce prices.”
Part of the announcement also included 3500 MHz spectrum auction rules. This spectrum will be key for 5G networks, set to be much, much faster than existing 4G LTE networks. The special part about today’s announcement is a 50 MHz set aside for regional companies such as Shaw and Videotron. This means Rogers, Telus and Bell will not be able to bid for this portion of the spectrum, giving regional players a slight advantage.
Reacting to the ISED announcement today, Shaw Communications Inc., the parent company of Freedom Mobile, said: “it was a critical step toward advancing competition in the wireless market.”
“Today’s decision by Minister Bains reflects the success that Freedom Mobile and other regional providers have had in creating truly effective wireless competition across Canada,” said Brad Shaw, CEO of Shaw Communications, in a statement.
Shaw also added the set aside “is one of several critical elements to ensuring disruptive wireless competition in Canada can be sustained and strengthened in the 5G era.”
The company also called for more regulatory stability, saying “regional facilities-based providers can only continue to invest billions of dollars in spectrum and competitive networks that provide Canadians with affordable alternatives to the Big 3 carriers if there is a predictable, stable, and supportive regulatory environment.”
Quebec regional carrier, Videotron, said it was “pleased” with ISED’s 5G spectrum set aside decision, saying it is happy Ottawa has “recognized the vital importance of facilities-based regional players in the mobility market and welcomes the government’s decision to set aside spectrum for them in the upcoming auction.”
Videotron says since it entered Quebec in 2010, regional prices have fallen more in the province than anywhere else in Canada, citing Competition Bureau data of 35-40% lower pricing in an area where a fourth player is available.
“Having a strong fourth facilities-based regional player is what’s best for consumers. Videotron’s presence in Québec is a good example. We are proud of the world-class network we have built out over the past 10 years to support real and lasting competition, and we will continue innovating in order to offer Quebecers the best prices, services and products on the market,” said Jean-François Pruneau, President and CEO of Videotron.
Videotron says as along as ISED allows facilities-based regional players to compete versus incumbents, it will “continue offering consumers a network that meets their expectations and stimulating innovation in its service area.”
