Ottawa signaled Wednesday that it has little appetite to abandon or change its present efforts to inject sustained competition in the national wireless market.
Pleas made directly to the federal government by big cellphone providers as well as other corners of corporate Canada – even one of the country’s major unions – appear to have fallen on deaf ears, with Industry Minister James Moore issuing a statement saying the feds will “stay the course.”
That means keeping in place an auction for new airwaves set for early next year that will give a clear advantage to new players to the market by allowing them to buy up to twice as much wireless spectrum as the established players Rogers Communications, Bell and Telus Corp. are permitted to purchase.
Speculation has been rampant that the auction will pave the way for U.S. giant Verizon to enter the country and begin competing against the three.
“We are committed to ensuring the best possible outcomes for Canadian consumers,” Moore, who was appointed to the post of industry minister earlier this month, said.
“We want all regions of Canada to benefit from competitive market forces, which is why more progress must be made. We will continue to stay the course by ensuring Canadians benefit from a competitive telecommunications industry,” the minister said.
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Carriers require radio spectrum to support communication between wireless devices like smartphones and the carrier’s network. The current batch up for auction is ideal for supporting wireless Internet signals, making it particularly valuable.
The heads of Rogers, Bell and Telus have been on the offensive in recent weeks, urging policy makers to “level the playing field” in the auction, and suggesting that if Verizon or another foreign giant is given the red carpet treatment into the market, the ensuing competitive environment will lead to job losses and a pullback of investment in services in rural areas across the country.
Each met with Moore directly earlier this week to make their case.
Ottawa has pursued policies since 2008 to raise the competitive intensity in the sector, giving smaller newcomers Wind Mobile and Mobilicity among others preferred access to their own spectrum. The new entrants have failed however to carve out a sustained position in the market. Verizon is reportedly negotiating now to purchase the two struggling carriers.
Prices for cellphone services, which until the launch of the new carriers in 2009 had become the most expensive in the developed world per customer, have ticked steadily downward in recent years. Industry Canada said Wednesday prices had fallen by almost a fifth since the policy shift in 2008.
Read more: New 2-yr wireless contracts come with higher monthly bill
But as new carriers have struggled to win subscribers and remain competitive threats, prices have begun to creep higher once more. Earlier this month, Telus Corp. introduced new two-year wireless contracts that charge customers more money.
“Our Government’s telecommunications policy was not created overnight. It is the result of a vigorous consultation that started in 2008 and continues today. All players – industry, consumer groups and everyday Canadians – contributed to this policy,” Moore said.
Industry Minister James Moore’s statement in full:
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