As soon as stock markets closed at 4 p.m. Canadian time on Tuesday, the Canadian Radio-television and Telecommunications Commission (CRTC) ruled on the issue of wireless roaming rates.
The CRTC decided to cap the amount that Canada’s major wireless carriers can charge smaller carriers for allowing their customers to piggyback on the major networks while roaming.
This decision follows a public consultation which included a public hearing that was held from September 29th to October 3rd, 2014.
Wholesale national roaming rates are considered fundamental to increase competition in the wireless market because they allow smaller players to pay to give their customers temporary access to the incumbents’ networks until their own infrastructure can be built up. The rates, as well as the terms and conditions under which smaller carriers obtain wholesale services, are critical to their ability to offer competitive retail services.
As such, the CRTC will regulate the rates that Bell, Rogers and Telus – the three firms that dominate the market – charge other companies for wholesale wireless roaming services. The CRTC’s ruling mandates a cap, but it’s not yet clear what the cap will be: in fact, the CRTC has set temporary rates effective 5th May, and is requiring Bell, Rogers and Telus to file final proposed rates by November 4, 2015.
The CRTC has reserved the right to reject the rates if it feels they are too high. Once the rates are established, they will be in force for five years. This new system covers only GSM technology.
The ruling should provide less powerful rivals, such as Wind Mobile and Quebecor Inc’s Videotron unit, with a greater ability to expand their services to more of the country. Even if the new wholesale rates do not affect directly retail prices, the new ruling aims at encouraging those companies to pass the savings on to their customers.
Rogers, BCE and Telus have all together more than 24 million mobile customers out of less than 30 million in total. Those companies affirm that they spend billions on network-building and should not be forced to share them at a discount.
Mr. James Moore (Industry Minister) said that the decision is
“good for consumers… We now have a certainty that access to spectrum and roaming is now an essential service. It’ll be regulated by the CRTC in a fair way through a negotiated price point, and it’ll only, I think, serve consumers well through more competition”
he said. According to Mr. Moore, the rate cap should entail more competition.
As for MVNO, the CRTC’s decision does not provide for any mandate access for MVNOs to use wholesale access to offer inexpensive services.
“The CRTC could have gone further by facilitating innovation through new market entrants, such as mobile virtual network operators“
Open Media said.
Jean-Pierre Blais, Chairman of the CRTC, said that
“With more than 28 million subscribers, the wireless sector is of tremendous importance to Canada’s economy. Innovation that leverages the use of wireless networks now forms part of our daily life and the important role of wireless technology increases each and every day. With microcomputers that fit in our palm, pocket or purses, we can do our banking, check up on our kids or elderly parents, apply for jobs, register for Government services or stay in contact with our friends, co-workers or clients. The measures that we are putting in place today in the wireless market will ensure that Canadians continue to have more choice as well as innovative high-quality services.”
Source: Toronto Sun, CBC, GC, CRTC, Macleans