TORONTO – The Canadian wireless market is a competitive success story that doesn’t require micro-managing from any level of government, the Canadian Wireless Telecommunications Association president Bernard Lord told the Toronto Board of Trade on Monday.
Saying “we need to be mindful of the risk of economic engineering experiments that could change that value for our country and for Canadians,” the text of Lord’s speech noted that the Canadian market is growing well and serving Canadians nicely as “smartphone adoption continues at a very rapid pace. We’ve gone from a penetration of just 36% two years ago to over 66% today.
“Canadian mobile data traffic is predicted to grow nine-fold from 2012 to 2017, equivalent to 600 times the volume of Canadian mobile traffic from what it was just 10 years earlier in 2007.”
As well, the Canadian wireless sector generates a huge economic benefit and Lord quoted a Nordicity study the CWTA commissioned, which found that the Canadian wireless sector generated an overall economic benefit of over $50 billion in 2011, up 16.7% from 2010.
Canadian wireless companies continue to invest in their networks, too, spending $10.5 billion in the last four years and in 2011, the Canadian wireless sector’s investment per subscriber was close to $95 ($94.89), second only to Japan and more than twice the world average, Lord added.
It’s not that government should have no role, but it should maintain “a very limited role,” said Lord. “To ensure that Canadians have access to the devices and technology they love, we need more spectrum to enhance networks; lower government licence fees and smarter regulations to benefit consumers by the way we do business. All of these things government can and must do to allow the industry to keep giving consumers wireless value.”
Lord pointed to the CRTC’s new Wireless Code of Conduct for Canadian companies to abide by as another positive – and that was something the entire industry urged the Commission to create and adopt. “This Code will bring certainty and clarity to Canadians across the country as the Commission has decided that the new Code will supersede any provincial legislation.”
However, the CWTA and its membership remain troubled by ongoing regulatory worries – and the rhetoric emanating from the federal government, which will negatively affect investment, if allowed to continue. “We have seen a substantial increase in volatility in the wireless sector in the past several months as a result of regulatory uncertainty,” reads his speech.
“But interference in the free market by imposing new definitions of competition with regulation upon regulation can hardly be described as the right public policy choice. Often, the unintended consequence of government regulation is the inadvertent creation of loopholes. That’s what our Canadian wireless companies faced this past summer (Ed note: If you somehow missed it, just search for “Verizon” on Cartt.ca). The current rules for the upcoming spectrum auction were originally designed to encourage new Canadian entrants in the Canadian marketplace. But they became enormous loopholes open to being exploited by giant foreign incumbents.
“These loopholes still need to be addressed for future spectrum auctions beyond January 2014… Think of it this way. When you have a Canadian industry that is a global top-runner in investment, technology, speed, and choice, it’s fair to ask ‘what problem exactly is government trying to fix?’ Government needs to think carefully about seeking to intervene, interfere, and micro-manage this kind of business success.”
– Greg O’Brien
