Last Thursday, the Canadian Radio-television and Telecommunications Commission (CRTC) issued new rules to decrease wireless costs, accelerate competition, and provide more affordable options for residents. The telecommunications regulator is focusing on the country’s three dominant carriers — Rogers Communications, Inc., BCE Inc., and Telus Corp. — to resell access to their networks. Bloomberg reported the move would allow smaller players like Quebecor Inc. and Cogeco Communications Inc. to compete on wireless plans.
Prime Minister Justin Trudeau’s government has also been putting direct pressure on wireless providers, according to Bloomberg. It’s targeting a 25 percent reduction in the cost of services by 2022, and using the threat of further regulation to move the needle.
Last week’s ruling does not apply to foreign companies that own spectrum, and the decision will be in effect for seven years, according to the CRTC. Analysts said the decision created a “middle ground” between the country’s big carriers and those who argued for a much less restrictive policy on wireless reselling, reported Bloomberg.
“The decision will prevent truly disruptive entrants (like global mega cap online operators Google or Amazon) into the business,” BMO Capital Markets analyst Tim Casey said. CIBC analyst Robert Bek added that the decision is “a generally benign outcome for the Big 3” that won’t change the competitive dynamic very much.
The ruling also pushes dominant carriers to sell lower-cost plans effective by July. Bell, Telus, Rogers, and SaskTel will be expected to “offer and promote” monthly wireless plans for $28 that include 3 gigabytes of data and offer cut-rate plans priced at $15 for people who don’t use much service.
Another factor to consider is the merger between Rogers and Shaw Communications, Inc. The $16 billion deal was announced in March, and since then, regulators have been focused on a four-player wireless market. Innovation Minister Francois-Philippe Champagne has described the merger as a “landmark” decision.
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