While much of the focus of yesterday’s Rogers quarterly call was on the wireless sector (see part one on roaming rates), it should be noted that company executives indicated that consumer broadband Internet prices – which the OECD recently reported were among the ten most expensive in the developed economy world – will continue to increase. Moreover, the company called unlimited bandwidth offers “short-sighted” and recent price increases just one step in the efforts to monetize broadband services.
Archive for July, 2013
In 2011, the OECD released a report that found Canadians face some of the highest wireless roaming fees in the world. Some tried to downplay the findings – the National Post’s Terence Corcoran claimed that the roaming fees actually looked pretty cheap, while Rogers pointed to several packages that it said “would rank us among the lowest cost of countries surveyed.” Yet as regulators in other countries began aggressively targeting high roaming fees – EU costs have dropped 91 percent over the past six years given regulatory initiatives – Canadian companies apparently began to fear that similar regulations could make their way here. Indeed, according to Rogers, it was necessary to get “roaming in line” or face the prospect of regulation.
Telus is currently engaged in a full-court lobbying press aimed at killing the government’s plans for a spectrum set-aside for new entrants in the forthcoming spectrum auction with Telus CEO Darren Entwistle warning ominously of a “bloodbath” should the government move ahead with its strategy. Entwistle notes that the company has invested more than $100 billion in the Canada and that the industry as a whole has invested $420 billion. Yet only a fraction of those figures are actually linked to wireless investment in the way that most would conceive of it. A Telus spokesperson said yesterday that spending on technology and infrastructure was actually $30 billion, leaving $70 billion for operational expenses, such as paying salaries, office supplies, and rent. Last year the CWTA said the entire Canadian wireless industry has invested $25 billion on spectrum and wireless infrastructure. That is a far cry from Entwistle’s $420 billion figure, which is apparently based on such a broad notion of investment that my lunch at Subways and coffee at the Second Cup is also an investment. More on the Telus numbers in a must-read post from Peter Nowak.
Peter Nowak debunks many of the recent claims from Telus on capital investment and pricing in the Canadian market, concluding that Canadian carriers rank first in the world in average revenue per user, third in profit margin, and some of the highest consumer prices in the world.
One of the headliners behind last week’s federal government cabinet shuffle was the shift of James Moore, formerly the Minister of Canadian Heritage, to Industry Canada. The Minister of Industry position holds the promise of having a significant impact on the Canadian economy, as the department is responsible for everything from competition policy to foreign investment reviews to telecommunications regulation.
Christian Paradis, now the former Industry minister, never seemed particularly interested or engaged in the portfolio. He disappeared on legislative initiatives (Moore assumed the lead over a copyright bill that was technically Paradis’ responsibility and his privacy bill never left the starting gate), allowed regulations to languish (the anti-spam regulations are years overdue), and failed to articulate an overarching vision for key sectors such as the digital economy.
While inaction might have few consequences in a smaller department, my weekly technology law column (Toronto Star version, homepage version) notes the policy failures at Industry slowly began to accumulate and emerged as a mounting problem for the broader economy. Indeed, the Prime Minister’s Office appears to have assumed control over the telecom file earlier this year, emphasizing the need for greater competition and consumer rights in a series of moves designed to welcome foreign giants such as Verizon to Canada.
Moore undeniably brings better communications skills, more energy, and experience with several of the portfolio’s most contentious issues, generating great expectations for future actions. What might Canadians expect from Industry Minister Moore?