May 3, 2016 4:08 pm
Updated: May 3, 2016 4:32 pm

Who can’t use this Canadian startup’s cheap cellphone plan? Canadians

In February, Canada’s broadcast regulator denied an appeal by small Internet providers to require major telecommunications companies to provide access to their wireless networks.

Philippe Huguen / AFP/ File

A Waterloo, Ont. company can offer a great wireless deal — a $5 phone and a plan for just under $25 a month with unlimited text and talk.

The problem: they can’t offer it to Canadians.

In the U.S., Canadian startup Text Now contracts with Sprint to buy chunks of the telecom giant’s wireless network, which it then resells to its customers. The American customers use Sprint or available Wi-Fi, as needed.

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But none of the big Canadian carriers want to make a similar deal. After a CRTC decision in February, that’s a choice they’re free to make.

“The best service is only in the U.S.,” laments CEO Derek Ting. “We’ve been trying really hard to bring that service to Canada, but without a whole lot of success.”

In Canada, Text Now can only offer a free, ad-supported phone service that needs Wi-Fi to operate.

“We’ve hit a brick wall in terms of bringing the upgraded service into Canada.”

To offer wireless service, small players like Ting need a partner so he can operate as a ‘mobile virtual network operator,’ an intermediary between the customer and big telecom companies.

The situation seems unlikely to change, after the CRTC ruled against a group of independent Internet providers who wanted access to the big wireless providers’ networks.

READ MORE: CRTC denies appeal to force big telcos to give access to their wireless networks

The Canadian Network Operators Consortium, which represented dozens of small Internet service providers including TekSavvy and Distributel, wanted access so they could offer their own wireless services using the networks of Bell, Telus and Rogers.

Bell, Telus and Rogers had argued that the case for building new infrastructure would be undermined if third-party carriers could piggyback on the bigger networks without building any towers of their own.

READ MORE: Independent Internet providers want to offer own wireless services

Canadians pay for some of the highest-priced wireless service in the industrialized world, a 2014 CRTC report showed.

In the meantime, the ad-supported phone service is basic, but for some the price is right:

“There’s a huge segment of teens and tweens, who are using the service as their first cell phone service. They can’t afford Rogers or Bell. They use our service kind of like having a gateway to phone service.”

Despite the fact that only three per cent of the company’s customers are in Canada, Ting — who graduated from the University of Waterloo in computer engineering — has no plans to leave Waterloo.

“In terms of customer care or logistics, most of our core operations are in Canada, in Waterloo,” he says. “We want everything to be close. We’re a little biased toward supporting the local community here.”

With files from The Canadian Press

Minister of Innovation, Science and Economic Development Navdeep Bains addressed concerns of a CRTC decision on Thursday to reject an appeal from a group of small internet providers to mandate what are called Mobile Virtual Network Operators.

© 2016 Global News, a division of Corus Entertainment Inc.

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