PALM BEACH, Fla. – Unless the federal government deploys some "artificial measures" there appears to be little opportunity for a fourth national wireless carrier to spring forth when Industry Canada performs its next spectrum auction, expected sometime in the first half of 2008, said Rogers Communications president and COO Nadir Mohamed on Tuesday.
Responding to a question posed during his appearance at the Bear Stearns 20th annual media conference (which was webcast) about the spectrum auction and the potential for another wireless company to start-up and compete with Rogers Wireless, Bell Mobility and Telus, Mohamed dug into the recent Canadian wireless history.
"I tend to remind people that we had a spectrum auction fairly recently and there were no new players of size that came into the market," he said of the 2004/05 auctions.
He pointed out that when Rogers bought Microcell in 2004 and assumed the Fido brand, it was headed to bankruptcy protection – and prior to that Telus bought up startup Clearnet, consolidating the market to where it is now, with three large players and assorted regional plays and MVNOs (such as SaskTel, MTS, Videotron, Virgin Mobile, and Amp’d Mobile, among others).
"Having more than three players has not worked out in our market," said Mohamed. And, looking at other countries around the world, "three to four players seem to be the norm," he added.
Also facing any new entrant would be how well established the existing players would be by 2009, likely the earliest launch date for a newcomer. Right now wireless penetration is just short of 60% in Canada and by ’09, "we’ll be well north of 70%," said the COO. "So, is there a case to be made for another player to come in?"
The only way for it to work is if the federal government "artificially incents a new player," through certain new regulatory caveats like mandated tower sharing, for example, said Mohamed, or limitations on the bidding process, too.
However, he is hopeful the government won’t go down the artificial measures road and will stick to the "market forces" focus it has been so honed in on for the past year, resisting such measures to get a new wireless company established, concluded Mohamed.
