NAFTA negotiations could mean cheaper cellphone plans for Canadians, expert says

Click to play video: 'U.S. reveals NAFTA goals'
U.S. reveals NAFTA goals
ABOVE: The NAFTA negotiations seek compromises that would overhaul the longstanding treaty between Canada. U.S. and Mexico. – Jul 17, 2017

The Trump administration has released its wish list for renegotiating the North American Free Trade Agreement (NAFTA), and it could mean cheaper cellphone plans for Canadians, one expert says.

One of the proposals aims to make it easier for U.S. telecom companies to do business in Canada.

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“Canadian consumers would ultimately benefit from this,” Walid Hejazi with the Rotman School of Management at the University of Toronto said. “It gives consumers more variety and lower prices.”

Canada is largely dominated by three providers: Telus Communications, Rogers Communications and Bell Mobility, plus a few smaller carriers.

The NAFTA negotiations, which were released Monday, says it wants the U.S. “to provide fair and open conditions” in telecommunications.

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This stems from complaints the U.S. has had about the Canadian telecommunications market.

WATCH: How will the U.S. NAFTA wish list impact Canada?

Click to play video: 'How will the U.S. NAFTA wish list impact Canada?'
How will the U.S. NAFTA wish list impact Canada?
In a 2016 report by the U.S. trade representative, it states “[Canada] is one of the most restrictive regimes among developed countries.”

The current “telecom monopoly” in Canada makes it difficult for foreign players to complete, Hejazi said.

“But the global players would love to come into Canada as there is so much profit,” he added.

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When Wind Mobile (now Freedom Mobile) entered the Canadian market in 2008, it was met with “obstacle after obstacle,” Hejazi said. Telus, Bell and Rogers complained to the Canadian Radio-television and Telecommunications Commission (CRTC) saying Wind Mobile didn’t adhere to Canada’s stringent foreign ownership rules.

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“The owner of Wind Mobile actually said he regretted coming into the Canadian market,” Hejazi said.

Canadians paying high rates

Canadians are paying some of the highest prices for basic cellphone service in the G7 group of nations, a 2016 CRTC report says.

Canadians pay around $96 a month on average for a plan offering unlimited talk and texting and 5GB of data, compared to $42 a month in the U.K., according to the latest international price comparison commissioned by the CRTC.

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“The telecom companies in Canada are notorious for very high cost, poor quality and poor customer service,” Hejazi said.

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The NAFTA negotiation the Trump administration wants could mean more competition for Bell, Telus and Rogers.

Hejazi believes the three providers will lobby against the proposal, as it means sharing infrastructure and customers.

But in the end, it means fewer restrictions and more choice for Canadian consumers, he said.

“Ideally, all restrictions on foreign telecom service will be lifted,” he said.

Will it go through?

NAFTA talks are expected to begin on or around Aug. 16 (the earliest possible date).

Laura Dawson, the director of the Canada Institute said the NAFTA negotiation list is more of an “aspiration document.” The final results will most likely turn out quite differently, she said.

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“We don’t know what the priorities are yet and what U.S. stakeholders will hit hard on,” she said.

The Canadian telecom market is actually quite small, compared to other markets like China or Vietnam, so it may not be worth a company’s time to try to get into the market here, she said.


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