Canada’s wireless sector is dominated by three big players, and the federal government wants to encourage competition by tailoring a sudden auction of airwaves for small companies. The wireless spectrum auction will be held early next year and set aside 60 per cent of the space for small players. New rules would prevent it from being sold to the large companies later.
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‘Canadians pay the most, don’t get as much’
“Canada is one of the highest-priced nations in the world for wireless service,” says Carmi Levy, an independent technology analyst and journalist. “Canadian citizens pay the most and they don’t get as much for their money. They don’t get as many minutes, they don’t get as much data when they buy a cell phone and so the government wants to put some money back in their pockets. They think if they actually succeed there, they’ll get their votes.” Levy notes the government is facing an election next year.
Canada’s government has tried to break up what Levy calls a monopoly for years, and to encourage small companies to set up a new network. It has tried to change the rules, it has invited companies from other countries to come in and buy up smaller players, all to no avail. Levy says this new move was a big surprise.
Sudden auction ‘shocking news’
“They wanted to shake things up a little bit. It’s unheard of for a government to schedule a wireless auction just like that. Usually they’re on the calendar for years in advance. Everyone knows about them. For the government to just wake up and say ‘we’re going to have one now,’ it’s never been done in Canada, I don’t think it’s ever been done outside of Canada. It’s probably some of the most shocking news in telecommunications we’ve seen in a very long time,” says Levy.
Smaller players need deep pockets
Canada is a huge country so it takes a very big investment to start a new wireless network. Levy says smaller companies may be talking about mergers now to try to meet the challenge. He thinks the Videotron company, based in the province of Quebec has deep enough pockets to take a run at it.
‘All about politics’
“Probably by the end of next year there will be a fourth option for Canadians across the country and, if things play out the way the government wants, Canadian consumers will finally get a break on their monthly cell phone bill,” says Levy, “(and) they’ll vote again for the government because they’ve saved them some money. That’s what it’s all about—politics.”
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