These continue to be turbulent times for the communications sector. Following a report in the Globe and Mail on Friday about talks between TELUS and Mobilicity, there are reports of consolidation taking place with the 3 independent new entrants who just left the national wireless association, in addition to a previously announced option agreement for Rogers to acquire spectrum from Shaw.
While Industry Minister Christian Paradis has indicated an objective for all Canadians to have access to at least 4 wireless service providers, as I asked last month, do we have the right policies in place to drive investment in innovation and consumer choice for Canada’s wireless sector?
In theory and with the best intent, these measures are supposed to help foster a more competitive market. The problem was that these measures were announced without an overall strategy against which they could be tested for consistency with an ultimate objective. So the measures sound good, but how can we determine if they fit together with an overall plan?
In practice, we may have already seen the first unintended, yet somewhat predictable sign that some of these measures could be counter productive.
Four years ago, on the occasion of Globalive being awarded its spectrum license, I wrote a piece asking “What’s the rush“. Following payment of the auction price, I wondered what was the hurry to get the actual piece of paper? The issuance of the license started the clock ticking on a number of counters. At the time, my focus was on the expiration of the initial 10-year license period. I asked why carriers would want time counting down during the first year or so that it would take to build the network.
At the time, I was taking a long term view, thinking about companies that bought spectrum in order to build a business that would be around for a while.
There were others who may have just been looking at getting past the 5-year restrictions on potential buyers, always keeping in mind the opportunity to sell. That is why the license award table, identifying the start date for each buyer of AWS spectrum, is an important reference document to keep on hand. There are blocks of spectrum that have still not been activated; some of the new entrants have licenses in a range of geographic areas that may never justify a network build or market launch.
I have been wondering recently if government intervention is introducing too much uncertainty into the Canadian wireless marketplace. Is the ground shifting too much at once?
In the past few months, the Industry Minister has tried to build interest among global players in investing in the Canadian wireless market, such as during his recent visit to Mobile World Congress in Barcelona. Is the investment climate in Canada favourable for global players?
There are lots of regulatory adjustments to the wireless market in play right now, all motivated by fostering consumer benefits, but seemingly lacking coordination. Is too much change happening at once? Among others, we have seen: The federal government liberalized foreign investment in all but the three biggest telecom carriers in Canada; some provincial governments have enacted a patchwork of consumer laws that target mobile carriers; the CRTC is developing a wireless code of conduct that may or may not supersede these laws; Industry Canada is introducing new license conditions and has created uncertainty in the rules associated with license transfers that could be associated with mergers and acquisitions.
These issues, and many more, will be explored at The 2013 Canadian Telecom Summit, taking place June 3-5 in Toronto. In particular, Rita Trichur from the Globe and Mail is moderating a session on Wednesday, June 5 called “Unplugged: The next generation of wireless”. Earlier that day, Namir Anani from ICTC is moderating a session called “Building an Innovation Economy”.
Registration fees increase May 1. Have you registered yet for The 2013 Canadian Telecom Summit?