Report: Canada’s Big Three to Continue Market Dominance

by Jordan Richardson on February 9, 2010

A report from UBS Investment Research has been making the rounds of the telecom community in Canada and has been turning quite a few heads with its claims and predictions for industry trends for 2010. While many lists of predictions are easily dismissed as mere idle talk, one of the claims from UBS makes perfect sense.

Phillip Huang, the author of the report, says that UBS expects all three major Canadian telecommunications players to continue to assert their dominance on the markets.

The plans for Rogers, BCE and Telus include a considerable wealth of marketing directed at eliminating traditional wirelines and heading in the bearing of more wireless plans. Huang also discussed plans from the Big Three to continue pressing forward in the smartphone market.

To anyone who’s been watching Canada’s telecommunications industry for any amount of time, predicting the supremacy of Canada’s Big Three companies isn’t really worth much.

But the report may have stumbled on to something that Canadian telecommunications consumers should take a closer look at.

“We expect competition on wireless data to remain relatively rational between the three incumbent players encouraged by their common need to offset declining voice revenues,” the report says.

In other words, Canada’s telecommunications oligarchy wants to keep a reasonably close eye on the competitive levels between, well, themselves. There is a common goal for BCE, Rogers and Telus to succeed in a world of declining revenues, so the similarity of their rates and rate plans appears to be somewhat by design.

To push the UBS report a step further, is it logical to suggest that Canada’s telecommunications giants are in fact, at least in part, leaning on one another to preserve market control?

In light of rising competition from alternative companies and services, it may be reasonable to suggest that Canada’s Big Three could band together in order to line the markets and maintain their appropriate share. Like a group of Mafia families electing to divide territory in the spirit of authority, Bell, Telus and Rogers may well be dividing and conquering Canada’s regional markets.

With this as a possibility, any Canadian telecommunications customer should be looking critically at the implications of such an arrangement. Do Canadians really want to be caught in the grips of corporate monarchies or should there be real market choice and competition for a variety of products and services?

The UBS report goes on to explain that “new entrants” in the telecommunications industry will not be able to compete due to smaller coverage areas and product lines. Without the consumer support needed to split the bonds of Canada’s Big Three, it simply isn’t sensible to believe that Canadians will see the end of three-year contract incarceration and other regrettable “services.”

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