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New Wireless Entrants Abandon CWTA Strategy of Delay, Dilute, or Defeat Competitiveness Initiatives

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Thursday April 11, 2013
The Canadian wireless sector was hit by a shock yesterday as the three major new entrants - Wind Mobile, Public Mobile, and Mobilicity - announced that they were withdrawing from the Canadian Wireless Telecommunications Association. The companies argued that the CWTA has shown consistent bias in favour of Bell, Telus, and Rogers, the three incumbent providers. All three used strong language to emphasize their frustration with the CWTA, speaking of a "blatant disregard" for new entrants and failures to honour promises of fair representation. 

The move is a major blow to the CWTA, which has long promoted itself as the voice of the industry. For example, during the recent CRTC consumer wireless code hearing, it opened by stating:

CWTA represents virtually all of the major companies in Canada's wireless telecommunications ecosystem. Our members include wireless service providers, handset manufacturers, builders of network, infrastructure and numerous other companies that develop and produce products and services for the industry and for consumers.

No longer.  So why the change? 

A key part of the CWTA mission (in serving as the voice of the incumbent providers) has been to delay, dilute, or defeat efforts to address the competitiveness failures of the Canadian wireless sector.  It is why it implausibly claims that the market is competitive at the same time that its (now former) member Wind Mobile told the CRTC in March:

Canadians are frustrated by the manner in which the control that Bell Mobility, TELUS and Rogers (collectively the “Incumbents”) exercise in the wireless services market is exerted. The Incumbents, having created the deplorable consumer conditions in the marketplace which has forced some Provinces to step in and provide a basic level of consumer protection, are seeking to use this Proceeding as a tool to stop these legislative initiatives.

The delay, dilute or defeat strategy has been evident for years. Before the 2008 spectrum set-aside that opened the door to new competitors, the CWTA argued consistently against a set-aside, claiming that "the Canadian wireless market has been competitive from the outset." Once new competitors entered the market, the CWTA focused on delaying, diluting or defeating consumer wireless protections. It argued against them at the provincial level and recommended delays to the implementation of the forthcoming CRTC code (along with support for three year contracts, no intervention on unlocking phones, and other anti-consumer positions).

The opposition to consumer protections placed the CWTA in direct conflict with the new entrants. In 2011, Mobilicity openly opposed the CWTA, stating:

We are exceptionally disappointed with the CWTA's lack of foresight in continuing to act only in the interests of the Big Three wireless oligopoly. As members of the CWTA, we repeatedly voiced our opposition to its submission to no avail.

When Ontario introduced similar rules, Wind Mobile and Mobilicity both expressed support for the new rules.

As part of the CRTC's consumer wireless code hearing, Wind Mobile's reply in December to the consumer wireless code started with the following:

At the outset, for the sake of clarity, WIND Mobile would like to highlight that our reply comments, which unsurprisingly differ from some of the positions taken by the dominant incumbent wireless service providers (Bell, Rogers, and TELUS ("BRT")), also sometimes differ materially from the positions taken by the Canadian Wireless Telecommunications Association ("CWTA") in this proceeding and most notably in its reply comments filed today. The CWTA has elected to take certain positions over the express objections of WIND Mobile (on the basis that such positions are not "industry positions" but rather those of a BRT-dominated CWTA board). Accordingly, without needing to single out positions taken by the CWTA which align with those of WIND Mobile, WIND Mobile simply states that WIND Mobile does not support the CWTA submission and these reply comments alone set forth our views on these matters.

The company offered the following comments on three-year contracts at the CRTC hearing itself:

the primary thing we want to speak to today in that regard is three-year service contracts. Now, the Big Three have claimed that consumers love them, and that we can't take away such an adored option. This is unfortunately also the position also being advocated by the CWTA. In this regard I have to stress and they knew going in that I would stress that the position that they are advocating is not the position of the industry. It's not the position of WIND Mobile and we're a member of the CWTA and we're in the industry.

Viewed in this light, the only surprising thing about the decision to abandon the CWTA is not why, but rather what took so long. As for next steps, the new entrants should move swiftly to establish the CCWTA - the Canadian Competitive Wireless Telecommunications Association. Such a move would provide a powerful alternative voice to the CWTA and ensure that both the government and the CRTC recognize that there are deep divisions within the industry with many legitimately concerned about the state of competitiveness of the Canadian wireless market.
Comments (42)add comment

David said:

...
Good for them. And like you I ask "what took them so long"?

Now, the same thing needs to happen to the cable/satellite, telephone, and (most importantly, and most in need of reform) the Internet provider industries ... isolate and destroy the anti-competitive incumbents (who 'just happen' to be the same gang of crooks.)
April 11, 2013

Simon Lockie said:

CRO, WIND Mobile
Great post. And good context for CWTA claims that they were shocked we left and that they never take positions that don't represent the views of all their members.
April 11, 2013

Sandy Harris said:

...
Last time I had figures quoted to me (unverfied, but believable) Canada had both the highest cell phone cost on Earth (US a distant second) and the highest percentage of locked phones.

I'm a Canadian just back from a number of years in China. Some differences, not least cell phone cost, are shocking. In China, locked phones (and region code encumbered DVD players) are completely unknown, and locked-in contracts quite rare.

You buy a phone and SIM card (usually separately) then periodically top up the prepaid charges. With fairly moderate use (maybe 12 calls and 30 SMS messages a week, about half of them long distance because I had friends in other cities) my cost was under $10 a month.
April 11, 2013

Hub said:

...
It is hard to say "what to took them so long" without being them, but my understanding is that they really wanted the CWTA to work and therefor tried to build consensus. It didn't happen and the tipping point was reached.

This is a huge blow to the CWTA more than to the new entrant, IMHO
April 11, 2013

Chiclet said:

...
Don't over think this one. It's a publicity stunt by these guys to try and get more favours from the government. They could have withdrawn silently from the CWTA but instead launched a media campaign to attract as much attention as possible. Whether they are part of the CWTA or not is totally irrelevant to anybody. Does anybody really think Bell or Rogers cares if Wind is part of the CWTA or not? Just think about it.
April 11, 2013

s. draper said:

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Right. They couldn't afford $50k each to be members of ctwa, and they are bleeding money (i worked for one of the news entrants and quit because of constant penny pinching. I was told we couldn't order pens so I should pick them up wherever I can) but they're going to spend ten times that amount to set up a new association? Dreaming in technicolor
April 11, 2013

JN said:

"favours"
@Chiclet

Obviously RBT doesn't care about whether the little guys stay or go! Obviously the little guys are trying to draw attention to the fake CWTA organisation which is only an enabling tool of RBT to continue to ripoff and disinform Canadians not unlike the CRTC. As for using the term "favours" that the little guys are trying to get from the government... well, that's a load of BS! It's not called a "favour" when you are the honest ones who are trying to get your government to represent you and the best interests of Canadians and consumers by trying to rid the Canadian Telco market of collusion and "actual" so-called crooked "favours".
April 11, 2013

Chiclet said:

...
@JN

Please spare us the altruistic drivel. Wind and Mobilicity are out to make a profit just like everyone else. The only reason they offer lower prices today is to try to buy marketshare because they have a a shabby product with poor network coverage and marginal customer service. If you resent the idea of free markets then North Korea might be the only country in the world that will meet your expectations. You might be interested to know that Wind's parent company offers cell service there too!
April 11, 2013

Mr Magoo said:

1
The faster they move on creating their own CNOC-type, and style, lobby group the better.

Mobilicity et al. already stated they didn't fear the Quebec (or other) consumer protections laws while the CWTA and it's real mouthpieces (not the puppet chair from the maritimes) expressed how it would lead to all sorts of confusion and the consumer apocalypse.

Now is the time to make their stand and put their words into action. Stand up. Show people they mean what they said. Makes waves. Make change. Show they believe in what they said.

Do this and people will see.

Or, do nothing and be a nobody. Which is no better than being the chair of the CWTA who flaps his lips and pretends to care for the payout.
April 11, 2013

JN said:

Free Market!
LOL, Chiclet thinks it's a free market! ROFL!
April 11, 2013

Chiclet said:

...
LOL, JN thinks Wind and Mobilicity are here because all they want to do is give Canadians cheaper cell service! ROFL! JN probably thinks the tooth fairy is real too! Hahaha!
April 11, 2013

Joah Moat said:

...
Why can't we just dismantle CRTC. Oh I get it, it's the corporations that are running the government.
April 11, 2013

Joah Moat said:

...
By the way Chiclet, why don't you stuff yourself. It's people like you that make me wish God would show me the way to invent my disintegration ray. When something in nature gets too big it suffers a critical mass effect. We here in Canada love to carry around the burden of critical mass until we herniate and bleed inside. It's an accepted part of the tundra. But really, the large companies have too much power and they are ruining innovation, they are ruining are kids attitudes about rich and poor. Why do you even exist Chiclet, you are just going to suck nutrients from our mother until you and yours will make another black spot in time. Give your head a shake.
April 11, 2013

Sue M said:

...
@Joah

Please go back and reread Chiclet's comments, he or she simply said it's a publicity stunt by the 3 new carriers and they are trying to make a profit just like everybody else. And quite frankly I agree. Your response (or should I say meandering rant) was exceptionally immature and added nothing of substance to this discussion.
April 11, 2013

Joah Moat said:

...
That's not what was implied and you know it. You're wrong, I'm right-- what does it matter in the end. Nothing will change in our white kingdom stonewall.

For what it matters,

Cheers,
April 12, 2013

Sue M said:

...
@Joah

Are you high? That last comment made even less sense than your first ...
April 12, 2013

Chiclet said:

...
... Joah Moat

You are one strange dude. Disintegration ray, God, sucking nutrients from mothers, critical mass, herniating, tundra, black spot in time. It looks like you got lost on your way to some kind of fantasy adventure gaming site ...

Good luck with wherever you are going!
April 12, 2013

Mr Magoo said:

1
A small Snippet from Cartt.ca

Ditching CWTA not about strategy, but frustration, says Wind; new association a possibility
http://www.cartt.ca/news/15393/Cable-Telecom/Ditching-CWTA-not-about-strategy-but-frustration-says-Wind-new-association-a-possibility.html

... “I want there to be Ontario consumer protection legislation – and for (the CWTA) to be spending my money fighting against it is simply inappropriate,” Lockie said. “We withdrew… because of active position-taking and lobbying efforts that are directly contrary to our efforts and directly favourable to the incumbents interests and that’s exactly what I was promised would not happen.

“We have been put in the position several times to have to go against our industry association both in the media and in proceedings – and we also have to stand by and get these weekly reports on how they just met with the PMO or with Ontario and reinforced was a vigorously competitive market it is and how well-served Canadians are.”

The last straw for Lockie came when he read an Op-Ed piece contributed to Cartt.ca by the CWTA, authored by Lord. The piece was a strike back at some of the negative attacks on the Canadian wireless business by University of Ottawa professor Michael Geist, who has amassed quite a social media following among Canadian consumers. “I happened to be reading (the Op-Ed) at the same time I got my invoice from the CWTA… and I thought ‘you know what? This doesn’t make sense to me.’ I think the positions being taken by Bernard are absurd. I expect Telus to take those positions… but when you have independent journalists and academics like Peter Nowak and Michael Geist… why is an industry association taking a position on something that is so fundamental as the efficiency and concentration of spectrum holdings and all these very contentious matters?” asked Lockie. ....

Tosses chiclets theory out the window... Read the rest at cartt.ca
April 12, 2013

Chiclet said:

...
Mr. Magoo

Does change a thing about my theory. The new guys are looking to create as much anxiety and frustration with current service providers as possible - just another desperate attempt to win market share - which explains all the publicity stunts. I don't have the figures in front of me right now but I believe Wind has the highest churn rates (>2%) in the entire industry. They also have the highest number of CCTS complaints per subscriber. That indicates Wind has a very high level of customer frustration relative to the other carriers.

If you go back and read the CWTA submission to the CRTC on the wireless code you will see that they are actually very supportive of the code, they are just pushing for nationally consistent standards as opposed to a regional patchwork of rules.
April 12, 2013

Joah Moat said:

...
I'm the one that's high. I refuse to sign with the devil for a smartphone. I'd rather fork-out $400 for a mediocre phone then tap-out for the next best thing in technology. I adore using fantastic metaphors, although seemingly cryptic in the mundane world, to me it's a grand orchestration of the English language. I love it. But my words yesterday were hateful, and I apologize. Mr. Geist doesn't need to see the venom that spews from my finger tips.

I tell you I am so frustrated with my peers. People around me just don't seem to care about the gifts that we have been given. They seem to take it for granted that spending their children inheritance is their given right and they intend to have fun doing it. Meanwhile, our great northern people turn a blind-eye to the ongoing cancers of our society. It's no surprise that our youth should suicide, for what place is this to exist but a selfish pit of micro-denizens. The problem is not with the corporation, it is not with the government, it is with the selfish and cowardly nature of my peers. Unwilling to stand up for our precious nation that is sullied under our feet.

Anyhow, good for wind and moblicity for taking a stand against the white kingdom stonewall. (We live in a white kingdom and we like to stonewall.)

Cheers,
April 12, 2013

Common sense said:

Why are Canadians such suckers for advertising
I send hundreds of voice messages and thousands of text messages a month and pay NOTHING! I use VOIP and EMAIL and use the INTERNET. This is what old timers did before they came up with the silly idea of charging people for every message they send and suckers lined up in droves to pay hundreds of dollars a month for the priveledge. Come on people, there are more important things that you should be doing with your money than handing it over to Rogers!
April 12, 2013

Mr Magoo said:

1
Why would I read the CWTA's propaganda submission when I have the recordings right here on what they stated to the CRTC in person?

1. The CWTA explained to the commissioner that unlocking a phone is the same as taking apart your blender and playing with the electrical and machine parts inside of it.

2. CWTA states they want anything that touches telecom to follow new code and not Consumer Protection laws (this includes your device).

3. The CWTA stated that this new code should over-ride and supersede any provincial Consumer Protection regulations.

For example, some provinces has strict Consumer Protection regulations that prevent Bell and Rogers from automatically renewing contracts. This would be eliminated.

and it goes on... of course i could post more, but you can go to CPAC yourself and listen to the CWTA presentation yourself instead of reading their watered-down goobilygook propaganda made for the public to see. Listen to them instead.

Anyhow, chiclet, it doesn't really matter to me how you want to try and spin it. It's all there for people to listen to. Shows you didn't bother yourself to actually hear their words during the wireless code presentation. So do yourself a favour and go listen to them.
April 12, 2013

Frosine said:

...
In Canada, consumer protection is under provincial jurisdiction, not federal. Saskatchewan can choose to implement a different set of rules for wireless service providers than Quebec or Ontario. But what happens to the poor consumer who moves from Saskatchewan to Ontario and finds out that the options they used to have back home are no longer available to them in Ontario, even if they stay with the same service provider? I'm not sure I would call that progress. A consistent set of rules across the country would make much more sense - but that wouldn't create jobs for as many lawyers ;-)
April 12, 2013

Mr Magoo said:

...
Frosine, I see nothing over complicated. Nor do I envision a consumer apocalypse.

If you're in a contract situation the duration of it is in the prov it started in. If the prov you are in allows a telecom to automatically put you in another contract, then it restarts with your new address anyhow.

In a non-contract situation, it's the prov you live in. It's month-to-month anyhow.

For Quebec, it doesn't matter if you buy outside of Quebec or in Quebec (as a resident), it all falls as if it were aquired in Quebec.

Simple as that. If someone needs to lawyer-up for that, so be it.

For the CWTA & PIAC to proclaim this is all too complicated for people (while Telus stated they had no problem or great expense with it), they can both take a hike.
April 13, 2013

JN said:

Chiclet is a corporate trolling idiot!
Of course they are in it for a profit, they're businesses! Do you ever post a comment with facts which aren't already blatantly obvious to everyone here. You also have a problem with assuming too much about people, which just makes you a troll!
April 13, 2013

Frosine said:

...
Mr. Magoo

Mr. Magoo, it's even simpler than that. Just shop around and pick a phone from a company that doesn't auto-renew contracts - we don't need to hire more government civil servants and lawyers to protect a few lazy consumers from themselves. My husband has his phone from Telus, mine is with SaskTel and my daughter is with Koodo. None of those companies do automatic contract renewals. The Koodo tab is a nice feature for paying off the handset subsidy and my husband's Telus phone has a similar subsidy repayment mechanism, you can pay it off anytime without penalty. In fact, you probably shouldn't even call it a contract since it bears no resemblance to the contracts that were the norm 5 years ago. My SaskTel phone has a more traditional style contract but it was a very, very good deal at the time so I'm happy.
April 13, 2013

Chiclet said:

...
@JN

Ouch! Someone got up on the wrong side of the bed this morning. Did your mom takeaway your Play Station again? Hope the rest of your weekend goes better!
April 13, 2013

JN said:

...
Just keep proving me right... Chiclet! ;)
April 13, 2013

Chiclet said:

...
@JN

“I tell you we will not bid – unless they set aside the frequencies, unless they really show seriousness that they want to create competition,” Mr. Sawiris (Wind) told The Globe and Mail’s editorial board. “But to say, ‘We want to create competition, we want your money.’ They take our money and they leave us to the dogs.”

Or how about this one:

“The government helped birth these new entrants and if they don’t find a way to sustain our growth through the auction, it’s like throwing babies in the bathtub and turning the water on.” John Bitove, Mobilicity Chairman.

http://www.theglobeandmail.com/report-on-business/wind-mobile-backer-threatens-boycott-of-wireless-auction/article4183886/

It looks pretty black and white to me - demanding the government give them more favours or they won't play. Withdrawal from the CWTA is just another publicity stunt in the campaign. Let's not forget that Wind is currently owned by Vimpelcom which has more than 200 million customers in exotic locations like North Africa, Pakistan and North Korea. They are more than 7 times bigger than all the cell phone companies in Canada combined - they are plenty big enough that they shouldn't need any more favours from Canadian taxpayers. If our government grants them any more favours then we are the stupid ones for letting it happen.

April 13, 2013

jonathan said:

...
it seems strange that Mobilicity and Wind, both companies seeking buyers, would take such a contrary stance to potential suitors. how would abandoning CWTA affect the possible negotiations with Telus and Mobilicity?

Three carriers leaving CWTA at the same time is strategic, but it is shortsighted to dismiss this as a publicity stunt. CWTA clearly wasn't adovcating for all carriers' concerns equally, and staying affiliated with the other 3 carriers implies they are all in agreement.

Having diversity and an even playing field in wireless will make it more like a utility. I have no idea why people defend 3 companies which charge more for comparable service. Why do people insist on paying more money?

April 13, 2013

Cynic said:

...
Acquiring more spectrum in the next auction will make the new entrants more valuable to potential buyers and further enrich their current owners if they sell out. The companies are not yet profitable and likely never will be so potential buyers are only interested in their spectrum assets. They have a low value and poor quality customer base with low ARPU and high churn which isn't worth anything to potential buyers.

It's a myth that prices in Canada are higher than other countries and the only activist group still playing that card is OpenMedia - but they have damaged their credibility a lot recently by using really outdated data. Here is a link to a story in the Post a few days ago that speaks to the current pricing reality

http://www.financialpost.com/m/search/blog.html?b=business.financialpost.com/2013/04/12/telecom-sector-not-quite-as-uncompetitive-as-its-been-made-out-to-be&q=Telecom
April 13, 2013

JN said:

Paid Shills trolling the Geist site.
There sure are a lot of paid major Telco shills around here spreading BS!
April 13, 2013

Chiclet said:

...
@JN

I see your mom still hasn't given you back your Play Station. Perhaps you could use this time to open a newspaper to educate yourself on this issue and then join the debate like a real adult.
April 14, 2013

JN said:

...
What's wrong my little assuming RBT troll, still can't write anything original? Why don't you just step away from the keyboard... you're not fooling anyone and you're just embarrassing yourself. Bernard is better at pushing BS than you are and that's not saying much!
April 14, 2013

Ben said:

...
A bold and welcomed move IMHO. It's about time.
Wireless and Broadband access in Canada is deplorable with respect to options, pricing structure and clearly uncompetitive from a consumers standpoint. Oh yeah.....it seems that the consumer has been left out of the equation from the big 3.
The abount of BS spewing from the big 3 is actually laughable but it seems that those "powers" setup to "gaurd" the interests of the consumers who use these products have more often than not absolutely failed us the Canadian consumer. I welcome the move by Wind, Mobilcity and Public Mobile and hope that they stand firm.
April 15, 2013

Sue M said:

...
I don't see how the Wind, Mobilicity and Public Mobile withdrawal from the CWTA is going to change anything. Most Canadians have never heard of the CWTA and couldn't care less if they were members of the CWTA or not.

The real problem is Canadian Consumers are not signing up to buy services from Wind, Mobilicity and Public Mobile in sufficient numbers for them to remain in business. Why not? How do you convince consumers to give up the Bell and Rogers phones they supposedly hate so much and buy Public Mobile or Mobilicity instead? Consumers are obviously voting with their wallets but not in favour of Wind, Mobilicity and Public Mobile.
April 15, 2013

JN said:

It appears that RBT uses many aliases to promote anti-consumer BS!
Anybody posting here in defense of RBT is quite obviously a corporate troll who is being paid directly or indirectly to say such anti-competitive BS & lies about what consumers actually want. Seriously... no consumer wants to be locked into an overpriced contract for 3 years and to say anything different is absolute propaganda.
April 15, 2013

Sue M said:

...
Dear JN

With all due respect my post was not defending RBT at all. I was questioning why consumers would say one thing while doing another. If consumers were truly unhappy with their current service providers then Wind, Mobilicity and Public Mobile should be laughing all the way to the bank. But according to the newspapers they appear to be on death's doorstep when they should be enjoying a stampede of new customers.

I just looked back at all your posts on this thread and, without one exception, all you've done is insult and criticize other posters. You are obviously struggling with some personal issues so I wish you all the best in your treatment and recovery.
April 16, 2013

Robert said:

...
JN - please just go away
April 16, 2013

JN said:

LOL!
Thanks, but no thanks! You would like the voice of truth to leave... you clowns remind me of Harper Conservative supporters! I think I'll stay and be the voice of reason/consumers instead of leaving all of you shills in here to muddy the waters of Michael Geist's site with your corporate BS as per your plan.
April 16, 2013

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...
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April 22, 2013

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