The 2030 deadline for Rogers, Telus and Bell to share their networks with Quebecor is creeping up, and it’s creating a massive cloud of uncertainty over the Canadian telecom sector. According to a new report from BNN Bloomberg, Scotiabank analyst Maher Yaghi thinks the current rules are propping up competition at the expense of our actual network quality.
Right now, the CRTC forces the Big 3 to let challengers like Quebecor use their infrastructure, through the wholesale MVNO framework. While that’s helped bring down plan prices recently, Yaghi argues it isn’t a long-term fix. “In our view, for Canada to continue to see a competitive wireless market, we need to see significant investment by the challenger, which we have not seen so far to date,” he told BNN Bloomberg, which is a subsidiary of Bell Media.
The problem is that by “socializing” the networks the big guys spent billions to build, the government is lowering the return on that investment. Yaghi warns that the CRTC is going to have to make a tough choice soon: keep subsidizing the challenger and watch our networks deteriorate, or “stop the regulation, as it was intended to be stopped in 2030, and let Quebecor compete on their own.”
Investors aren’t exactly thrilled either. Stocks for the incumbents have been underperforming, and Yaghi suggests they should actually cut their spending on new tech to protect their cash flow. But he admits that won’t do much for Canada’s overall productivity.
He also threw cold water on the idea that Quebecor is the “T-Mobile of the North,” calling the comparison “flawed” and “wishful thinking.” He pointed out that T-Mobile won in the U.S. by spending massive amounts of cash on their own 5G network, while Quebecor’s spending is currently among the lowest in North America.
If that government-mandated support disappears in 2030, Quebecor might find itself in a much tougher spot when it has to stand on its own two feet. We’ve seen Quebecor’s Freedom Mobile already putting huge pressure on Rogers, Telus and Bell by offering a $40 global roaming plan.
So what could happen if incumbents follow Yaghi’s advice and cut capex spending? That would mean slower expansion of 5G and rural coverage, for the sake of keeping dividend payments high to investors.
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Awww look at the poor big 3 pretending they built their own networks by themselves and without massive government handouts the whole way
We dont see anyone else stepping up to spend as much as they are, even if the government gives them “massive” subsidies to do so.
And exactly who are you expecting to step in? This ?!%&)”# country is making it impossible for competition to come in just to ensure that the Big 3 remain isolated and fully protected! Canada is the land of oligopolies. Major markets are led by a select few companies and this kills productivity and keeps our prices sky high.
I agree, what a ridiculous argument and article. The Big 3 always complain and cry and threaten to slow or stop network investment if government intervenes and allows competition. I agree, Quebecor should be investing more in their network but the big 3 has had a massive advantage over any challengers. 2030 will be the true test whether or not they want a true 4th wireless competitor.
Big 2.5 bell/telus share their networks…
No, they don’t. The law says they have to but they just ignore it and strangle the competition in it’s cradle and the government let’s it happen by refusing to enforce it’s own rules. If a law is not enforced, it isn’t a law. That’s why quebecor is the only other option, Quebec is the only one who has the power to stand up to them. The big operators have a gentleman’s agreement not to compete, that’s why our service is so terrible. The author was paid by the lobbyists to make the massive international corporations sound like the victims while they rake in the cash with their non-competition.
What handouts? They are private companies and have massive debt because thats what it takes to build a network in Canada.
Lmao GTFO
The anti-competitive big cartel three are so upset they cannot do a damn thing about it.
The CRTC sets the rules and regulations and they must follow them.
What, are they going to use filthy cryptocurrency to bribe somebody to do a DDoS or another cyberattack on quebecor’s Videotron, fizz and freedom?
If such an attack does happen, we know exactly who done it.
The incumbents have no-one to blame but themselves. When The last round of expansion happened (Public, Mobilicity, Wind) the incumbents were forced to share their towers with the new companies started. All of a sudden all of the towers were “full” and couldn’t be shared. They’ve fought any competition by collusion to block people out.
Back in the old days when Rogers was the Wind roaming partner they were charging WIND $1/MB and everyone else $.05/MB. Industry Canada had to put a stop to that.