Things can get pretty complicated, and the current setup of the Canadian wireless market is doing nothing except making things really messy. What if incumbents have the power to say no to new players when it comes to allowing them to use the network infrastructure they have built during the past decade? What does this mean for Verizon? Well, it doesn’t look good at all.
After posting impressive quarterly earnings, Bell and Telus have decided to speak out and demand the government block new entrants from using the cell towers they have put their money into during the past ten years (via Financial Post). It’s theirs they say. And they are requesting one “simple” thing: If Verizon decides to enter the Canadian market, that it be forced by law to invest in its own cell towers instead of using the country’s incumbent wireless carriers, Bell and Telus say.
As they point out, both have spent billions building their network infrastructure. For what? For a deep-pocketed newcomer to cherry pick struggling wireless startups and start using the cell towers the incumbents have built.
As a result, they are now asking Ottawa to close this major loophole in its wireless policy and ensure that any new entrant — such as Verizon — be required to build its own network. And they want this now: before the September 17 deadline for spectrum auction sign-up.
Also, they want to have access to the same two blocks of spectrum the new entrants are entitled to.
According to Telus and Bell’s calculations, Verizon could have access to spectrum that was sold to new entrants at a 41% discount compared to the amount incumbents obtained network licenses.
Even Quebecor chief executive Robert Dépatie has said that Verizon’s entrance onto Canadian soil would be catastrophic to regional players such as Videotron, since the entrants would end up empty handed.
After impressive growth recorded in urban areas, the next battlefield is rural areas. Verizon could threaten this expansion, since it would prompt incumbents to focus their energy on the battlefield, which, in this scenario, is the urban areas again.
What do you think? Should Ottawa allow Verizon to use Bell and Telus’ network infrastructure?