TORONTO – A day after Ted Rogers called him out as a possible “corporate welfare bum”, Quebecor CEO Pierre Karl Peladeau swung back at Rogers (albeit not as colourfully) using one of the niftiest bits of technology we have on the planet – that isn’t available in Canada.
After proclaiming himself “speechless” over Rogers’ comments, Peladeau began his speech to the Empire Club of Toronto by holding aloft an Apple iPhone, and scolded the big three incumbent wireless players (Rogers, Bell Canada and Telus) for not yet having the device in Canada. (The iPhone is a GSM device, however, and Rogers is the only GSM operator here).
(Also unsaid was that the reason the iPhone is not yet here in Canada has more to do with Apple than Rogers, where those inside the Canadian carrier dearly want to add the iPhone to its product repertoire.)
Quoting a recent newspaper article which said given Rogers’ data plans, having an iPhone could cost as much as $900 a month to run, Peladeau again went off on the supposedly high wireless rate structure in Canada. He also complained about low Blackberry penetration due to high data plan prices.
“The three big wireless players have a stranglehold on competition and your wallet,” said Peladeau. That has led to less price competition, less wireless penetration and less innovation, he added.
The answer, he believes, is more competitors and while Videotron is a wireless brand in Quebec through an MNVO agreement there, the company wants to be a national, facilities-based competitor. To do that it needs spectrum. To get spectrum, it must bid on it in the advanced wireless spectrum auction coming in 2008.
But what these speeches are about is to influence the rules of the auction, which have not yet been set. The incumbents want an open auction. Potential bidders, like Quebecor, want auction regulation so that spectrum will be set aside so that the incumbents can’t buy it all up, as well as mandated tower sharing and customer roaming agreements.
“There are 105 MHz up for auction in Canada… and it’s clear that the members of the big three wireless companies don’t need any more spectrum to operate, even with the new technology. However, it’s not hard to figure out it would be in their best interests to buy all the available spectrum in order to shut out new competitors,” said Peladeau.
“Without the right conditions, no new Canadian operator is able to buy spectrum at a price set by the current players, already well-established and with enough resources to maintain their oligopoly.
There were quite a few of the oligopolists in the audience for the speech today. Tables of folks from Rogers, Telus and Bell dotted the audience at the Royal York Hotel, all shaking their heads and muttering under their breath as Peladeau spoke.
“He started off completely inaccurate,” Canadian Wireless Telecommunications Association president Peter Barnes told Cartt.ca, after the speech. “He was talking about Blackberries and we have the highest per capita Blackberry penetration in the world… so his analysis is flawed from the get-go.”
Barnes also cited OECD statistics showing that Canada has competitive wireless pricing, better than the U.S.
What was also a little incongruous – explainable, but incongruous just the same – was Peladeau using the speech on one hand to ask for regs on the auction, while on the other, pleading for deregulation on the broadcast/media side. Quebecor is the owner of top-ranked Quebec broadcaster TVA, cableco Videotron and Toronto TV station Sun TV.
In Canada, he said “We still want to regulate the relationships between producers, broadcasters and others. We want to rely on quotas and multiple rules to give ourselves the illusion of protecting our identity. We want to maintain a tidy world where every action is predetermined, where media have their own space and develop in isolation of other media in the new economy,” he continued.
“This does not mesh with reality and is not my vision.”
Barnes and others among the pro-incumbent crowd delighted in pointing out the seemingly diverting viewpoints (even though Peladeau explained that Canada’s telecom market is protected anyway with all kinds of rules, such as no foreign control of those companies, and without a wide open market, a closed one such as ours without safeguards against monopolies or oligopolies is not a competitive market and is bad for Canadians).
“I had to chuckle because at the end, when he was talking about the need to do away with regulation, what he’s asking for (with the spectrum auction) is regulation… in a market crawling with competitors.” added Barnes.
