Canada’s Wireless Crisis

This week I delivered the opening speech at the annual Spectrum 20/20 conference that focused on the state of Canadian wireless marketplace.  As the title of this blog posts suggest, I believe that Canadian wireless is in a state of crisis, with limited competition and high data prices.  The talk and slides have been posted to and are embedded below.

Note that I also covered the issue this week in my technology law column (Toronto Star version, Ottawa Citizen version, Vancouver Sun version, homepage version).  I begin by noting that last week's announcement that the Apple iPhone will make its long awaited Canadian debut later this year generated considerable excitement.  While analysts focused on the bottom line impact for Rogers Wireless, it may be that the most important effects have already been felt in Canada since more than any industry statistics or speeches, the iPhone's slow entry into Canada has crystallized the view that the Canadian wireless market is hopelessly behind the rest of the world with limited competition, higher prices, and less choice.

The year-long delay of the iPhone – Apple first launched the device last June in the United States followed by France, the United Kingdom, Germany, Ireland, and Austria – provided tangible evidence that the Canadian market desperately needs an injection of competition (as the sole GSM provider, Rogers was the only carrier capable of supporting the iPhone) and more competitive pricing (Canadian data prices are far above the U.S. offer of unlimited data for US$20 per month).

In many ways, the iPhone saga merely confirmed what many Canadian consumers and businesses have known for some time.  Mobile data pricing in Canada is among the highest in the world, creating a significant barrier to the introduction of new mobile services and causing many consumers to carefully ration their mobile use for fear of being hit with a hefty bill at the end of the month.

The impact of uncompetitive pricing is felt beyond the consumer market.  Last month, the World Economic Forum pointed to problems in the wireless market as a key reason for Canada's slipping global ranking for "network readiness" (Canada has moved from 6th worldwide in 2005 to 13th today).  Canada ranked 75th in the number of mobile subscribers, trailing countries such as El Salvador, Kazahkstan, and Libya.  It also lagged behind countries such as the United Kingdom, Singapore, Italy, Sweden, and Norway on mobile pricing.

As the country falls further behind the competition, it is time to acknowledge that market forces alone will not solve the issue.  It therefore falls to policy makers to focus on the developing a marketplace framework that encourages greater competition and innovation.

The first step in that direction came last fall when Industry Minister Jim Prentice announced a set aside for new entrants in the forthcoming spectrum auction.  The auction, which runs over the next few weeks, is expected to pave the way for several new wireless competitors, who may join forces to create a fourth national carrier.

While the spectrum set-aside was a good first step, more is needed.  Prentice's goal should be to create the world's most flexible regulatory environment that encourages openness and interoperability.  The next round of spectrum auctions, which involves the coveted 700 MHz band, could include mandatory open access requirements that allow carriers, device manufacturers, and service providers to use Canada as the sandbox for mobile innovation.

Many companies are also beginning to focus on the potential of "white spaces," small bits of spectrum that exist between television frequencies.  The U.S. Federal Communications Commission is currently considering a proposal to make the white space home to unlicensed uses, thereby encouraging further experimentation.  Assuming that potential frequency conflicts can be resolved, Canada should follow suit.

The emphasis on openness could also extend to telecommunications ownership where the current foreign ownership restrictions may artificially limit Canadian competition.  There remains concern about completely opening up the Canadian market to foreign ownership, however, that may be a price worth paying to address the current malaise.

Prentice could also encourage competition by removing the barriers that consumers face in moving between providers.  The introduction last year of wireless number portability, which allows consumers to retain their phone number when they change carriers, helps in this regard.  However, restrictive long-term contracts and government plans to introduce legislation that could prohibit consumers from unlocking their cell phones would represent a case of one step forward, two steps back.

Finally, the Canadian Radio-television and Telecommunications Commission may want to take a closer look at the mobile marketplace.  The CRTC is committed to a de-regulatory approach and has for years largely left the mobile marketplace alone (with the exception of undue preferences and unjust discrimination), yet the regulatory hole has not served Canadians well.  Canadian iPhone fans may finally get their coveted device, but it is going to take more than a great phone to fix what ails the Canadian mobile marketplace.


  1. Orange Box says:

    Abolish protectionist laws
    Great article Dr. Geist.

    I disagree with the “it is time to acknowledge that market forces alone will not solve the issue” argument. In my opinion it is our protectionist laws that prevent competition. Once foreign carriers (and satellite providers) are free to enter the Canadian market, greater competition will occur with more selection of services and reduced prices. Only a free market without a protectionist/nanny style government can ensure that sellers and buyers get what they want.

    The Canadian government should focus on removing barriers of entry as opposed to meddling with free markets by overregulating every single aspect of telecommunication. I would love to see Bell Mobility, Rogers and alike to be squeezed by more innovative US, Asian and European competitors.

  2. Hands on for so many years…
    Orange Box is having some sort of “free market fantasy”. How can we go hands off after so many years of “hands on” government intervention? As much as I would like to think the free market would solve everything, it cannot in these situations.

    Do you think this is “free”: “… and government plans to introduce legislation that could prohibit consumers from unlocking their cell phones …” ?

    When the industry is pushing for government regulation, all bets are off on a “free market” — they are using their position and granted monopoly to then fence off their slice with lobbying and backroom deals.

  3. Can’t let this happen
    @Jon D,

    Respectfully, this type of attitude is what allows the big 3 to continue as they always have.

    I sincerely beleive that if we let even one international competitor in to kick their asses it would create a complete upheaval. Which like the long distance deregulation of the early 90s made long distance prices drop substantially.

  4. market forces
    @Joel & Orange Box,

    You\’re putting too much faith in market forces.

    US doesn\’t fare that much better than Canada – in most places they have 2-3 wireless providers comparing to ours 1. In Europe, Sweden is in top 3, and you can\’t get any close to socialism without becoming \”communist state\”. The problem with US and Canada is low population density. Without government intervention you won\’t get wireless service outside of big cities, it\’s just not profitable.

    And you won\’t get a free market without government control – most of the industries would collapse into monopolies.

  5. Anonymous says:

    I was at Spectrum 20/20 yesterday and just wanted to let you know that I really enjoyed your speech. I wish more of the presenters were willing to go out on a limb and say what they really thought.

  6. Market forces

    Just to clarify, I’m not putting my faith in market forces, however at this point in time, the government it protecting the big 3.

    Be it by making non-spectrum competitors to be 51% owned by a canadian partner (a la Virgin, Koodo)

    Which is not true competition.

    We need unfettered access from true competition, this is the only shakeup we can get for the time being.

    The population density arguement is total bull.

  7. time to quit the net says:

    time to quit the net
    why fight em let them have a internet with no one on it and no one getitng the p2p advertising of there tunes and movies, allow bell and rogers to keep harrassing tv users and over charge and one day when they have no customers or such a small base they wont be able to afford what they have and it all goes poof.
    That day will mark when afghanistan will have better internet service then us.

  8. When one wants to know
    When one wants to know how far we are from the rest of the world, one simply have to go to USA. On the plane, there are people using their wireless data connection, phone models are plenty, no 2 people have the same phone, as compared to here, where you will hear a phone ringing and 3 people will get their phone from their pockets. In here, even if the phone was able to do MMS, I couldn\’t make it work because it wasn\’t implemented. A 3 years old phone and I couldn\’t even use one of its functions, imagine!

    When one wants to know how far the USA is from the rest of the world, one simply have to go to Europe. Everyone has a cell phone, they are mostly using their phones as main phone, sponsorized, simm-free, unlocked, a booming environment with so many possibilities.

    When one wants to know how far the world is from cutting edge, one simply have to go to Japan. Phones everywhere, phone accessories and customization, phone rental, so many cool things you cannot even start to see the possibilities.

    I always said I\’d switch carrier as soon as the iPhone was to be in my place, as it\’s the sole phone that got any chance of making the cut in our high profit low service mentality.

  9. Kim Dushinski says:

    Interesting post and comments
    This is a great post. I came across it while researching mobile marketing law in Canada for my upcoming book about mobile marketing. No wonder I’m not finding much if Canada is so far behind.

    @Michel – When one wants to know
    What a well written comment about how far behind each subsequent country is. May I continue with saying that if one wants to know how far behind Japan is, one simply has to look to South Korea. Tomi Ahonen’s excellent book Digital Korea is an eye opener and made me feel like we in the US are living in the stone age.

  10. Wireless monopolies
    What a coincidence you wrote about lack of competition in wireless networks. I am with Storm (now Xplornet since they bought out Storm). I now (yesterday was the conversion) ‘enjoy’ a crippled version of the service I had with Storm and am encouraged to pay more money for the same service level. Sneakily, they block ports with their NAT so that online gamers and torrent (cbc download, not illegitimate) users who use more bandwith find their ports blocked unless they pay for a static IP address which, in effect, is a premium service for content. I would switch ISP’s but, surprise, Xplornet bought out the only competition in the area. I would LOVE for the US wireless sector to come to Canada to shake things up.

  11. This could in fact be two issues
    The issue of competition has been brought up so many times I am getting dizzy. However, can you have real competition while there are only a couple of providers who have towers? The last numbers I remember seeing was that there are a total of over 20 cellular companies in Canada, but they all use one of two networks, each of which is owned by one of the providers (Rogers or Bell). And did they not get spectrum set-asides when they first started constructing the networks?

  12. Greedy Cell Phone Companies
    Cellphone service in Canada is sad. My provider, Fido, will not support my unlocked Nokia E61i phone. So I can’t access their unlimited data plan which costs $7.00 per month. The funny thing is that the E61i is simply a somewhat upgraded version of a phone Fido sold and supported up until late last year – the Nokia E62. So supporting the

    The main difference between the two is that the E61i has built-in WiFi. Cell phone companies hate people who have WiFi phones, because they can surf using free WiFi hotspots, instead of paying usually overpriced data rates.

    Needless to say, I’m not going to be renewing my contract with Fido when it expires.

    It’s funny how cell phone providers all hold themselves out to be hip, technologically savvy and cutting-edge organizations. Yet they all sell crippled cell phones and overpriced service plans. Real competition in the industry is desperately, desperately needed.

    As if all this wasn’t bad enough, the Tories plan to add insult to the injury of people in my situation by bringing in legislation that will make purchase and possession of unlocked cell phones illegal. I suspect that this is a sop they’re handing to the cellphone providers in return for securing more competition in the industry.

    It must be nice to be in a business where your profits are dictated by government fiat and your customers have no freedoms or economic rights.

  13. really more competition needed
    Great article/speech!

    In Russia (which also has a vast unhabited territory) people can pay about 10c to call TO CANADA, and usual price of GPRS/EDGE Megabyte is about 25c (on special data plans it could be even 10c per Mb). Moreover there are also only 3 federal networks (in some cities more), but competition really helped to drop prices. Needless to say that in the modern world noone is paying for incoming calls – it\’s ridiculous!

    Unfortunately here i don\’t have a choice – there\’s only one GSM company – Rogers (FIDO\’s their brand too), so i\’m using voice only – SMS are quite expensive, and data is \”golden\” – 51$ per Mb in nonsense (as mentioned above, 7$ \”unlimited\” browsing is actually limited to WAP and branded phones).

    CBC mentioned a week ago there might be changes – I really hope so… Looking forward for WiMax coming to Canada

  14. Tony in Vancouver says:

    CRTC is committed to a de-regulatory?
    CRTC says, quote “The CRTC does not regulate wireless service providers due to the competitive nature of the service”. But with regard to the spectrum auction, Minister of Industry Jim Prentice says, “Our government’s intentions are clear: to achieve lower prices, better service and more choice for consumers and business”. Obviously Industry Canada doesn’t think wireless services are competitive so why wouldn’t the CRTC think wireless services are competitive and regulate according to the Act as they do with foreign ownership? Or if the CRTC doesn’t regulate the wireless industry, does that mean foreign ownership is allowed?

    The CRTC regulates this part of the Telecommunication Act:

    7(d) to promote the ownership and control of Canadian carriers by Canadians.

    But will not regulate this part:

    7(b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada;
    7(c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications;

    The CRTC is selectively choosing what and who to govern under Telecommunication Act.

  15. Rogers Screws iPhone!
    After Rogers’ announcement of its rates, this site says it all: [ link ]

  16. Anonymous says:

    “Canadians prove to be laggards in buying cellphones”

    [ link ]

    Article is a flop, but comments rule!

  17. Fuck you, Apple!
    Fuck you, Apple!


    “Black market of Russia is waiting for second-generation iPhone”
    [ link ] (in Russian)

    And here is a quote from the article:

    A source in Apple IMS Russia told «Gazeta.Ru», that there is no plan to launch iPhone in Russia at this time.

    As «Gazeta.Ru» wrote earlier, the possible reason for this is that Russia lacks a business model where the phone is sold locked to one service provider.

  18. Canadian Monopoly
    It really doesn’t matter what happens because Canada is a home for monopolies. From provinces who run the only insurance, hydro, and gas to national carriers who can pretty much charge what they want, its either them or the other guy. Canada needs a fresh new party away from the PQ, Liberals, NDP, and Conservatives. A new party with new ideas that upholds the same values as the old parties but have different people with different views. So it doesn’t matter what is up for auction; 700, 600, 500mhz it will all be the same.

  19. Tmobile G1
    The tmobile G1 has been unlocked, this will allow you to use a SIM card from any network, in any country. Hey guys FYI, T-mobile will unlock any phone for you for free if you are in good standing with the company, so don’t shell out the cash to get that iphone unlocked just call T-mobile.

  20. Less Connected
    So with this techno wonderful world, the internet and cell phone should have brought people much closer. But really it has desensitized us and made us hide in our little boxes, typing away. It’s all business and we get caught up in the race to have better things.

  21. foreign experience
    I was amazed while travelling in Europe and Africa how easy and cheap it is to swap sim cards to switch from one pay-go carrier to another in different countries. In Canada the oligopoly has really had a free ride and needs to be opened up with more service providers, and perhaps by banning locked phones.

  22. Yanni Donald says:

    WORLDWIDE client base in the cell phone sector.
    WORLDWIDE client base in the cell phone sector. Tremendous opportunity to get in the stock now. Check out how big the opportunity is at

  23. Wireless providers are crossing the line in Canada, there needs to be more pressure on them. I just moved to Canada from the US where I resided for 10 years. Consumers are a lot smarter there, they do fight for their discounts/deals, etc. I had a 2 year contract with Sprint and I was entitled to a new phone at the completion of the term, however going through their retention services I managed to have 3 new phones within the 2 year term, I was able to adjust my plan to my liking. So did many others.
    I tried Fido’s retention out of curiosity, just to see where I get, I was told that US gets great rates because of the large population…which is true. however it s not fair that these companies in Canada insist on having the same profits as the companies in the US. We are paying for it and at the end of the day it is about me and my money that I work hard for. I also noticed if you call the companies here and you demand, you can get somewhere. If everyone did it, things could improve for us, consumers.
    My advice, if you are not happy, pick up the phone, call them, complain about the service, demand refunds,there are many ways…don’t just wait until someone else will fix the issue.
    Joel, I agree, bring in more competition!

  24. Rogers “Communication”…what a joke!
    A media giant Rogers Communication using the term communication in their name is laughable at best. Ever tried to communicate with this arrogant and pompous organization. Customer service is the furthest ideology from their mindset. Extra billing, lack of accountability and frustrating and tiring out their customers into submission will be their legacy. I ask you to consider how a company can promote the concept of communication, when you cannot speak to anyone beyond a poorly trained customer service rep who does not have permission to resolve issues or escalate problems to any higher authority. The notion of the customer being “KING” has been modified at Rogers to the customer is a “JOKER” so let’s treat him/her that way. No wonder so many of us “JOKER’S” continue to expose this farsical communication company for what it is. The public needs to wake up and do to Roger’s what Roger’s did to Bell. Demand better service,rates and accountability. Wake up Canadians and see the reality of the organizations we allow to manipulate and dominate us due to our passivism. Go to to understand the real frustrations.

  25. Discounted or Free Service for Politicians??
    I’m just curious whether or not the ones who create the regulations receive specially discounted or free/unlimited voice/data plans? Has anyone investigated this? If so, then it would be a huge conflict of interest because they would have no reason to change the “status quo”, right?