Navdeep Bains, the Minister of Innovation, Science and Industry today promoted the government’s plans for wireless affordability. The effort was largely an attempt to reiterate its wireless affordability platform, which targeted a 25 per cent reduction in consumer wireless bills by emphasizing more competition through MVNOs and spectrum set-asides. The renewed emphasis on the policy comes as an updated Wall Report finds that prices have been declining in some baskets (the long-overdue emergence of unlimited-ish plans a key factor), but not in the core middle tier of plans where prices remain high. The government states “Canadians have been paying more overall compared to consumers in other G7 countries and Australia” and noted that the government will track pricing on a quarterly basis starting from January 2020. Coming on the heels of threats from incumbent telecom companies such as Telus, it was good for the government to re-assert its policy objectives for the sector.
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Bains’ Other Wireless Affordability Problem: The Broadcast Panel Plan for WhatsApp, Skype and Other Internet Services to Pay Canadian Broadband Taxes
The big headline story from the first week of the CRTC hearing into the wireless market was undoubtedly Telus CEO Darren Entwistle closing hours of testimony with a threat to slash investment and jobs if the Commission follows through with a mandated MVNO model. Entwistle told the CRTC:
There’s been a lot of conjecture related to disinvestment or reduced investment. It’s been a high topic related to what will happen as it pertains to MVNOs being introduced or another 25 percent price reduction being enforced, having already bettered the existing one that’s in place. And there are some views that this is just theatre perpetrated by the incumbents, in that if mandated MVNOs come to fruition or there’s an enforced second tier 25 percent reduction we will go on with status quo investing.
So one of the additional things I would like to file with you in confidence that I brought here today is a Board resolution at TELUS signed by all of our Board directors instructing management to pursue an investment reduction plan and a job reduction plan and a philanthropic giving reduction plan should these eventualities present themselves. And we’re discussing numbers where the reduction, and we’ll go public with it, but I’ll file with you the Board resolution, in the vicinity of a billion dollars of reduced investment over the next 5‑year. The reduced employment is in the zip code of 5,000 jobs over the next 5‑years.
In other words, in a bid to demonstrate that this was not theatre, Entwistle engaged in theatrics by pointing to a resolution from a board of which he is a member that supports his case.
Deja Vu All Over Again: Looking Back at Two Decades of Bell, Telus and Rogers Battles Over the Canadian Wireless Market
In the weeks leading up to the CRTC hearing on wireless services, there was no shortage of corporate lobbying, opinion pieces from telecom company consultants downplaying concerns about the competitiveness of the Canadian wireless market, and comments from company executives threatening to reduce investment if the CRTC mandated new competitions through MVNOs. Those claims have continued this week throughout the hearing.
Independent studies from around the globe have for years (here, here, here, here, here) found that Canadians face some of the highest wireless prices in the developed world. Yet if the usual claims of a fiercely competitive, reasonably priced wireless market provides a sense of deja vu, consider:
Canada has a well-earned reputation for some of the highest wireless prices in the world with numerous comparative studies finding that consumers pay relatively high prices for low amounts of data. There are obviously many factors behind pricing, but for many consumers the top line issue is how much does the wireless service cost and how much data do I get? Rewheel Research, a Finland based consultancy, has been at the forefront of pricing comparisons with extensive analysis of mobile data pricing in countries around the world. Its reports have often called out Canada, recently noting that prices are “a world apart” from more competitive markets. With Canadian telco giant Telus commissioning a study to challenge the Rewheel research, I’m joined this week on the Lawbytes podcast by Antonios Drossos, managing partner of the firm, who talked to me from Helsinki about their findings, what lies behind Canada’s wireless pricing, and the Telus-backed study.
Supporting a More Competitive Canadian Wireless Market: Speak Out on Navdeep Bains’ Proposed CRTC Policy Direction
Last month, Innovation, Science and Economic Development Minister Navdeep Bains took his most significant policy step to date to address telecommunications concerns by issuing a proposed policy direction to the CRTC based on competition, affordability, consumer interests, and innovation. As I noted at the time, the proposed policy direction will make a difference as those perspectives will become a more prominent part of the regulatory process that cannot be easily dismissed.