To nobody’s surprise, Canada’s major telecoms are planning to fight the minority Liberal government’s plan to cut cellphone costs by 25 per cent. The re-election promise was made prior to Prime Minister Justin Trudeau’s second term win.
According to Reuters, an anonymous executive from “one of the major firms” in Canada said, “We’re fighting a five-front battle here and we will use whatever tools are at our disposal to convince the powers that be … that this is wrong-headed.” The executive added the government allowing Mobile Virtual Network Operators (MVNOs) was a bigger threat than cutting wireless prices.
While no specific names were mentioned in the report, Canada’s wireless market is dominated by Rogers, Telus and Bell, with the trio owning roughly 90 per cent of the market.
The Liberal government wants to allow for MVNOs, essentially smaller firms leasing wireless from the Big 3 at wholesale rates. This would spurn competition as smaller firms would undercut pricing from incumbents.
Back in February, the CRTC launched a “comprehensive review” of wireless services, with a public hearing set for early 2020. The goal of the review is to “examine the state of the mobile wireless market and whether further action is required to improve choice and affordability for Canadians,” which includes “a focus on wholesale MVNO access.”
Robert Ghiz, President and Chief Executive of the Canadian Wireless Telecommunications Association, which represents major telecoms, said “They could probably achieve that goal (the 25% cut) by just continuing to encourage facilities-based competition in our country.” Ghiz also told Reuters “MVNOs were short-sighted and a bad idea.”
According to a spokesman for Innovation Minister Navdeep Bains, reiterated the federal government was serious about cutting wireless bills, but did not mention any specific plans on how that would be achieved.
Telus said it looked forward “to working with all parties to achieve our common objectives,” while Rogers said over the past half-decade, data costs across its wireless brands had been cut in half. Bell deferred comment to the CWTA.
The Big 3 are already pushing back against the Liberal government when it comes to internet, using a petition to fight the CRTC’s recent wholesale broadband rates decision from earlier this summer.