The government regulator that oversees Canada’s wireless network operators has opened the door to lower prices in a country that has some of the most expensive wireless data costs in the world.
Whether or not those lower prices materialize remains to be seen, but on Thursday, the Canadian Radio-television and Telecommunications Commission (CRTC) issued orders aimed at making it easier for smaller rivals to compete against the giants of the industry–Rogers, Telus, and Bell–that together control about 90 per cent of Canada’s wireless regional networks.
Canadians love their smartphones, but they also pay the highest prices in the world to use them. Swedish data analytics firm Tefficient has calculated that Canadian wireless carriers generate more revenue from customers using large amounts of wireless data than those in any other country do. (AFP-Getty Images/Philippe Huguen)
True MVNOs have no spectrum, towers or wireless infrastructure of their own, allowing them to offer wireless services at far cheaper rates because they don’t have to bear the cost of establishing and maintaining the infrastructure.
They are widespread and encouraged in other countries, such as the United States and Europe, where mobile data costs are often much cheaper than Canada.
Companies that choose to take advantage of the CRTC’s decision won’t be true MVNOs because they do have their own wireless infrastructure, but functionally they will be acting like one in certain parts of the country.
An MVNO is a wireless provider that doesn’t own its own cellphone network. Instead, it leases access from the big telecoms at wholesale rates and sells plans on that network to consumers. (Bloomberg/Aaron Harris)
“Regional providers that invest in network infrastructure and spectrum will be able to offer competitive services to millions of Canadians as mobile virtual network operators in areas where competition is limited,” the CRTC said.
“These companies have already been contributing to greater competition and helping to lower prices.”
Consumer advocates were less than thrilled with the decision.
“I think this is incredibly disappointing and a huge missed opportunity for the CRTC,” Laura Tribe of OpenMedia said following the decision.
“It really doubles down on the idea that a regional provider will be sufficient to correct the extreme market share that Bell, Telus and Rogers have.”
Mobile Virtual Network Operators can offer wireless services at far cheaper rates because they don’t have to bear the cost of establishing and maintaining the infrastructure. (Reuters/Shamil Zhumatov)
Norma-Jean Quibell, who works with Acorn Canada, a national organization that speaks for low and moderate income families, told CBC News in a story published following the ruling she’s glad to see the regulator taking some sort of action, but doubts it will have much of an impact.
Wireless service in Canada is simply unaffordable “and it hasn’t been for several years,” she told the CBC’s Pete Evans said in a story published Thursday.
“The gap between the wealthy and the low income is going to get bigger because now everything is online,” she said, noting that it’s not as if cell phone services are a luxury, or something people can do without.
Without affordable cellular service, “families are going to be more isolated from health care, government programs and education,” Quibell told Evans.
“Everything is online, it’s almost impossible to find a job today without being online.”
This graphic from 2019 shows average number of gigabytes used per month on the left versus average cost per gigabyte on the right.
CRTC chairman Ian Scott was more upbeat.
“While there are encouraging signs that prices are trending downwards, we need to accelerate competition and more affordable options for Canadians,” he said in a statement.
Asked in an interview with The Canadian Press whether average Canadians will actually see prices come down more quickly, Scott said he thinks they will – but some consumers and markets will see more of a change than others.
“Not all rates come down at the same speed. Not all regions have the same experience,” Scott told CP.
The CRTC also gave Bell, Rogers and Telus, as well as government-owned SaskTel, three months to provide more affordable plans for seniors, low-income earners and people who use mobile phones sparingly.
Mobile Virtual Network Operators, or MVNOs, are common in other countries but have yet to gain any traction in the Canadian marketplace, largely because of regulatory hurdles. (Reuters/Henry Romero)
So far, the Big Three have been staunch opponents of MVNOs – which they portray as businesses seeking the benefits of a national network without paying into the cost of building and maintaining expensive infrastructure.
The CRTC decision also comes as Ottawa is considering the proposed merger between Rogers Communications and Shaw Communications, the fourth largest wireless company in the country.
A recent study by the Swedish Analytics firm Tefficient found that Canadian wireless carriers generate more revenue per gigabyte than those of any other country in the world.
CBC News (Pete Evans, Aaron Saltzman), The Canadian Press (David Paddon)
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