By Ahmad Hathout
The CRTC has rejected a Rogers application asking the regulator to reconsider mandating access by enterprise business and internet of things applications to the mobile virtual network operator (MVNO) regime.
Rogers argued in its January application – backed by other big telecoms including Bell – that when the CRTC affirmed its preliminary view to open those segments to the mandated access regime to curb market concentration, it allegedly failed to consider that the market for these services “is likely one of the most competitive.” They argued there is sufficient competition suggested by the healthy number of international carriers providing IoT and enterprise services, lower incumbent revenues and service prices, and low-to-no cost of switching carriers for the 100-plus-employee enterprise segment.
The regulator, which gives regional carriers mandated access to the incumbents’ wireless networks for seven years, said Wednesday that its decision already evaluated the evidence used to back these counterarguments and found it didn’t make an error.
The CRTC said that despite the existence of international carriers in the country, they are still just resellers subject to the rules of the incumbents, such as reciprocal roaming arrangements to get access in some cases.
“Ultimately, the bottleneck facility – the [radio access network] – is controlled by the incumbents,” the CRTC said, adding the incumbents are effectively choosing their competitors. “In the Commission’s view, the incumbents’ extensive network coverage provides them with upstream market power and a competitive advantage in serving downstream enterprise and IoT markets. Downstream markets for MVNO access include both international resellers and retail end customers that are further downstream.”
And while the incumbents have entered into those types of reseller relationships with international carriers, the same has not been afforded to Canadian regionals to access those specific business segments, the CRTC said.
“Due to their smaller footprint, regional wireless carriers are at a significant disadvantage when competing for all downstream customers compared to the incumbents,” the commission said Wednesday, noting the additional competitive activity of international carriers.
The regulator also said it considered evidence pointing to declining prices for enterprise and IoT services as well as switching behaviour, finding those phenomena attributable to incumbents competing against each other and not against regional carriers.
“The Commission found that there was no persuasive evidence of rivalry between the national wireless carriers and regional wireless carriers,” it said.
The CRTC said it also factored in the low and often non-existent switching costs for enterprise customers, mainly due to eSIM technology that doesn’t require a physical card to get service.
Ultimately, that is just one type of switching cost, the commission ruled. Other costs include penalties for early cancellation of contracts, device configuration and integration, administrative costs and administrative burden, and various other fees and barriers, the commission said, adding regional carriers “may not have the financial resources to offer the same level of incentives as the incumbents to offset switching costs for enterprise and IoT customers.”
“In the Commission’s view, limiting the enterprise and IoT markets to only the incumbents, and specific global operators that enter the market using the incumbents’ networks limits the competitive choice available to end-users to a degree where it is likely that incumbents can exercise market power.”
In a statement to Cartt, a Rogers spokesperson said: “We are disappointed with the CRTC’s decision given the clear evidence that the enterprise and IoT markets are already highly competitive.”
Bell did not respond to a request for comment.
Photo via Bell
