OTTAWA – The CRTC must address "the incentives" that Canada’s largest mobile wireless companies have to raise their competitors’ wholesale prices, and, offer new entrants help in gaining a foothold in the market.
That’s the gist of a submission made public Thursday by the Competition Bureau to the CRTC, in response to the Commission’s review of wholesale mobile wireless services.
Noting that mobile wireless companies, particularly new entrants, may need to enter into arrangements with the likes of Bell, Rogers and Telus to obtain certain wholesale mobile wireless services, the Bureau said that the retail market power that these large incumbents wield allows them to "profitably maintain prices above competitive levels for a significant period of time", a move that clearly benefits the large companies.
“High wholesale costs may force rivals to increase their retail prices, resulting in some of their customers either leaving the market or switching to the large mobile wireless companies”, the submission continues. “As a result, the higher rates charged by mobile wireless companies for wholesale mobile wireless services may hurt competition in retail markets.”
The Bureau estimates that increased retail competition from a fourth nationwide mobile wireless carrier could result in gains of approximately $1 billion per year to the Canadian economy, in the form of better product choices, price reductions and other benefits for consumers. It also said that it supports regulatory measures, if and where they are needed, to ensure that new entrants have access to the wholesale services they need to compete effectively in Canadian mobile wireless markets.
Comments on the state of competition in the wholesale mobile wireless services market were due to the CRTC by May 1, and a public hearing on the matter is scheduled to begin on September 29, 2014.
