My daughter has been studying overseas for the past year and will be returning to Canada in about a week. She has a cel phone in one of the world’s most competitive markets for mobile service, with 5 carriers driving penetration in excess of 100%.
When she phones home, it costs 10 cents (US) per minute, including the airtime. When we call her, we use 10-10-100 (Telehop) and pay 5 cents (Canadian) per minute. She pays nothing to receive the call.
I found it surprising to open my Canadian cel phone bill this week to learn that my Canadian and US long distance rates will be increasing to 30 cents per minute, effective September 1, unless I want to buy a long distance bundle of minutes. Excess minutes are at the extorionary rates in any case.
The going rate for North American wireline consumer long distance is 4-5 cents per minute. And cel companies find that 5-6 times that amount isn’t enough. On top of the airtime.
It is no wonder that the CRTC plans to look at the issue of wireless equal access next year.
Bell Globemedia announced yesterday that it had reached an agreement to acquire CHUM Ltd, owners of 33 radio stations, a dozen TV stations under the CITY and A-Channel brands as well as 21 specialty stations, such as Much Music, Space and Bravo.
As I commented on Jon Arnold’s blog, while this transaction certainly adds size to CTV’s holdings, it will be a real question for the CRTC to deal with issues associated with concentration of ownership.
The combined organization will have overlapping properties in many major markets and will control music television in Canada, combining Much Music with the new MTV Canada.
The Globe and Mail reports that a number of stations will be shed (Ottawa, Barrie, London, Victoria) but that will still leave overlap in a number of markets.
With a newly converged Commission organization chart and calls for regulatory symmetry (in dealing with broadcast and telecom issues), will the CRTC permit the level of flexibility being sought in approving this deal? Not likely before it completes its review of the current (1999) policy for broadcasting which states:
The Commission will continue its current policy which generally permits ownership of no more than one over-the-air television station in one language in a given market.
Hold onto your hat! But watch for more consolidation activity as the trading begins.
Whatever happens, look for the CRTC to have a very open mind when it comes to the hearings into additional TV stations in Calgary and Edmonton, for example. With so many existing stations looking like they may be in the hands of just two players, the sometimes-activist Commission just might want to add more transmitters in the growing economy out west.
He also asks about the 10% “tangible benefits” tax that the CRTC seeks when approving such transactions.
By the way, I wonder what the impact of this deal will be on various mobile programs that target the youth market: Much Music and Rogers. We have seen stranger bedfellows emerge from M&A; activity.
Wireless service providers in Canada have been described as benefiting from an orderly, disciplined market.
As the regulatory filings start to come in from the industry in respect of the CRTC’s review of the Price Cap framework, the cable industry is calling for order in the wireline business. They concede allowing Bell and TELUS to have separate prices by province, but no targetted pricing. The last thing the cable companies want is for consumers to be caught in the middle of a price war in the communities that have competition.
Ever on the look-out for the interests of consumers in underserved territory, the cable companies are concerned that
This is anti-competitive because competitors only face the lower prices. Competitors do not benefit from higher prices as they do not yet operate in the non-competitive locations.
And besides, it would be un-Canadian to deviate from an orderly, disciplined market. Either everyone gets lower prices, or nobody does.
Three of the cable companies (Rogers, Shaw and Cogeco) put forward their initial position with a 9-page filing. Videotron came in with 13 pages, agreeing on the issues of rate de-averaging and discontinuing the deferral account.
A coalition of consumer groups (Consumer’s Association, PIAC and National Anti-poverty Organization) put forward an 85-page piece of economic evidence (ok – 14 pages of this were made up of the economist’s CV) that calls for a more aggressive productivity factor of 6% and an end to the deferral account mechanism. Translation: lower prices for all.
Bell, TELUS and MTS Allstream all filed their comments late in the day… we’ll talk about their positions at a later time.
It’ll be a battle of economists – not the stuff that makes great TV – but important in determining price competition for consumers and setting a tone for regulation of telecom in these changing times.
Forbes on-line is reporting that mobile users in the US are becoming heavier users of navigation, weather and travel related information,as well as music downloading.
According to Forbes:
Mapquest Mobile, which is run by Time Warner’s America Online, accounts for 22% of all revenue generated by downloadable mobile applications. The service costs about $4 per month.
On a different note, it is nice to see that Virtual Reach, a company that has been featured at The Canadian Telecom Summit in 2005 and 2006, has attracted the attention of Mark Evans. If you are looking to view RSS feeds from a mobile device, Newsclip is the way to do it.
Last week, I mentioned TELUS’ recent announcements in Ottawa and Montreal.
Today, TELUS announced that it will be the lead tenant in the first new office highrise to go up in Toronto in more than a decade. A new 30 story, 780,000 square foot building will be built adjacent to the Air Canada centre with links to the arena and to Union Station.
As I said last week, it’s a morale booster to be part of a company making these kinds of announcements.
