Appeared in the Toronto Star on July 7, 2013 as Verizon in Canada Could Spark Shift To Single North American Communications Market Reports that U.S. telecom giant Verizon may be preparing to enter the Canadian market has sparked considerable speculation on the likely impact of a company with a market […]
Post Tagged with: "Wireless"
Government Trumpets Declining Wireless Prices, but Canada Still Middling in Global Comparisons
The 2013 Wall Communications Report on Canadian wireless and Internet pricing, produced annually for the CRTC and Industry Canada, was released yesterday. The study generated headlines on declining costs for wireless services, with Industry Minister Christian Paradis claiming that government policies were delivering lower prices for consumers. The key takeaway came from yet another shot across the telecom bow from the government:
Our plan is working: important progress has been made and Canadian families are seeing the benefits. The Harper Government will not let this progress be lost or undermined. We will continue. We will not hesitate to use any and every tool at our disposal to protect consumers and promote competition in every region of the country.
The continued focus on wireless competition will be needed since the Wall Communications report also found that Canada is middling at best relative to the other countries in the survey (US, UK, France, Australia, and Japan). In fact, Canada is described as being “on the high side” for virtually every key category, with only the U.S. faring consistently worse.
Why a New Approach To Roaming Could Shake Up the Canadian Wireless Landscape
Having initially dismissed the prospect of Verizon’s entry into the Canadian market, telecom analysts are now seeking to downplay the likely impact, questioning whether Verizon would become a consumer-focused competitor and suggesting its focus may be limited to the corporate market. While the Verizon’s precise plans remain unknown, it seems likely that much of their interest in Canada stems from roaming costs.
Carrier roaming costs (and revenues) are typically shrouded in secrecy, but it seems likely that Verizon faces a significant imbalance when it comes to roaming costs in Canada. Recent reports from both the OECD and BEREC (the Body of European Regulators for Electronic Communications) point to the typical model for roaming costs, with carriers preferring to simply swap traffic with no net payments. The OECD discusses this in an international roaming study released last month:
Verizon on the Horizon: Could the U.S. Giant Shake Up More than Just Canadian Wireless?
Reports in the Globe yesterday that U.S. telecom giant Verizon has offered $700 million for Wind Mobile as part of an entry into the Canadian wireless market (which could also include buying Mobilicity and bidding in the upcoming spectrum auction) caused significant reverberations throughout the industry. The news sent the stock price of the Canadian incumbents plummeting and analysts – who only days ago were assuring clients such a move would not happen (“highly unlikely” said Scotiabank’s Jeff Fan; “what a joke” a telecom executive told Cartt.ca) – scurrying to assess the potential impact of a Verizon entry. Some have argued Verizon would have little interest in a smaller market like Canada, yet the company has actively promoted the elimination of foreign investment restrictions including in a 2008 submission to the Competition Policy Review Panel that detailed how “it had a long-standing presence in the Canadian telecommunications market”.
There remain many questions about a Verizon entry into the market via Wind Mobile, particularly with respect to the use of different wireless technologies and spectrum, but there is little doubt that the company could use its buying power to offer better deals on devices and North America-wide plans that leverage its U.S. network to offer significantly better roaming services. Moreover, the U.S. footprint could appeal to the corporate sector, offering the chance to steal customers from the current incumbents.
Less discussed would be the potential impact on broadcast rights and distribution.
CRTC Expects Carriers Will Implement Two-Year Contracts Before Start of Wireless Code
The CRTC’s introduction of a consumer wireless code earlier this month, which notably includes the right to terminate wireless contracts after two years, is expected to put an end to three-year wireless contracts in Canada. The code does not take effect until December 2, 2013, but the CRTC has now […]
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