OTTAWA-GATINEAU – The CRTC will release its hotly anticipated decision on wholesale mobile wireless services late Tuesday.
The Commission will stage a media “lock-up” from 2:00 PM to 4:00 PM ET on May 5 to provide a technical briefing to explain the different elements of the decision. The decision itself will be released at 4:00 PM, followed by a short statement by chairman Jean-Pierre Blais.
With the CRTC's sharp consumer focus, most are expecting the decision will see the allowable rates come down, which will bode well for Wind Mobile (and less so for the big three of Telus, Rogers and Bell).
"Many have said that the roaming rate is not important. We disagree," wrote Scotiabank telecom and media analyst Jeff Fan in a research note to clients. "Beyond spectrum, we believe it is the biggest factor that drives network coverage and quality in the near term, which affects market share and ARPU, which in-turn impacts the return profile of the fourth operator, which ultimately helps Wind attract additional capital. The lower roaming rate could have a direct margin lift for the fourth operator not just from lower cost but from higher revenue from higher ARPU and higher subscriber share, which are fundamental changes for potential investors assessing the viability of Wind.
"We believe that the lower the rate, the greater the flexibility Wind has to expand its home zone unlimited use coverage area. We believe that at close to 1¢/MB, Wind can eliminate its home/away zone distinction because it can absorb the wholesale roaming cost without affecting its margins," wrote Fan.
"Unless the CRTC wants to have its decision varied (as the Government has done on several occasions to Chairman Blais’ predecessor), it may be in the CRTC’s best interest to follow through with a 'Government friendly' decision." – Jeff Fan, Scotiabank
"Closing the ARPU gap by offering a better service. Don’t get us wrong, Wind still needs to deploy significant capital to materially narrow its network gap versus the Big 3. But without the home/away zone, its service will be perceived as less inferior and we think this will open up the service to a larger addressable market."
Continued Fan: "All of the recent CRTC decisions have all been very consumer friendly. Also remember the CRTC Chairman Jean-Pierre Blais said at the hearing, 'Arm’s length doesn’t mean you can’t touch.' The CRTC is organized as an independent tribunal but Chairman Blais recognizes that the Government has the ultimate final say and the ability to review and vary CRTC decisions. Unless the CRTC wants to have its decision varied (as the Government has done on several occasions to Chairman Blais’ predecessor), it may be in the CRTC’s best interest to follow through with a 'Government friendly' decision. We believe this decision is a low enough wholesale roaming rate to encourage additional capital injection to support Wind. "
Cartt.ca will be at the lockup.
