TORONTO – Putting six fierce competitors – armed with their own facts and relative truths about the current state of the wireless industry in Canada and abroad for a discussion on next year’s advanced wireless spectrum auction – onto a stage together is likely to result in something akin to a wireless “cage match”.
And that’s exactly what happened Wednesday on the last day of the Canadian Telecom Summit.
To kick off a special panel discussion about competition in the mobile wireless services space, moderator Terence Corcoran, Financial Post editor, introduced himself to the audience as Terry Springer, setting the tone for the proceedings.
None of the panellists threatened to hit anyone, but tempers flared frequently as wireless incumbents Bell Canada, Telus and Rogers Communications faced off against Advanced Wireless Services (AWS) spectrum-licence hopefuls MTS Allstream, Vidéotron/Quebecor and Toronto Hydro Telecom. Some of the more contentious issues discussed were spectrum set-asides for new entrants, and mandated roaming and tower sharing.
Seemingly conflicting market research figures from the OECD and Seaboard Group were bandied about to alternately support the incumbents’ insistence that wireless usage in Canada is high, therefore indicating a competitive market, and the new-entrant wannabes’ countering stance that Canadian mobile users are paying too much for services from the big three wireless providers. For every statistic offered up, a different interpretation was presented to show how market research could be used to support any given opinion.
When it came to suggestions about how to ensure next year’s AWS spectrum auction is conducted in an open and “unfettered” manner, the relative truths continued to abound.
Luc Lavoie, executive vice-president for corporate affairs at Quebecor, said the Canadian telecom industry has been a protected market for decades and continues to be today. Echoing comments made earlier in the day by Vidéotron president and CEO Robert Dépatie, Lavoie said to ensure a level playing field for new competitors, there must be spectrum set-asides for new entrants. He pointed out that the first spectrum licences issued in 1984 were free, as were more spectrum licences issued in 1995.
Lavoie said if new entrants have to compete with the deep pockets of the established wireless players for spectrum licences, then it isn’t truly an “open” auction. In addition, he said the foreign ownership restrictions currently in place also hinder new market entrants.
Two incumbent representatives, Bell Canada’s chief corporate officer Lawson Hunter and Telus’s president of consumer solutions, John Watson, both told members on the other side of the panel to “put your money where your mouth is” by putting together the necessary capital to bid for spectrum licences.
Dean Prevost, chief strategy officer for MTS Allstream, said there is no question his company is willing to pay for spectrum, but he doesn’t see that it could be an “unfettered” auction if new entrants are expected to match, and then better, bids from the big three who want to expand their existing spectrum capacity and shut newcomers out.
Bell’s Hunter indicated that increased demand for video over wireless is the key reason his company needs more spectrum soon. The story is the same for Rogers, who was represented on the panel by the company’s vice-president of regulatory affairs, Ken Engelhart, who had participated earlier in the day in another heated debate on telecom regulation.
Prevost rejected a suggestion that any new entrants into the wireless space may not be in it for the long term, defending MTS Allstream as “builders” who are not looking to flip spectrum licences.
Utility telco and WiFi services provider Toronto Hydro Telecom is looking to the spectrum auction as a way to open up more options for rolling out new services, said the company’s president, David Dobbin. He added that new competitors while only help to benefit the market.
During a keynote address following the panel, Competition Bureau head Sheridan Scott said: “To the new entrants on the telecom scene, and to the incumbents, I have one message — we protect competition, not competitors. We will protect you from anti-competitive practices, but we will not protect you from competition.”
The final remarks of the day on the subject of wireless competition came from Industry Minister Maxime Bernier, who gave the closing address at the telecom summit.
“There are those who say we need rules to allow new players into the cell phone business to guarantee more competition. Others say there is a lot of competition already. And there are also those who believe another way to stimulate competition is by removing the foreign investment restrictions,” Bernier said.
“I’m glad to see that everybody agrees that competition is a good thing.”
