Is There Any Real Competition in the Canadian Mobile Market?

by Istvan Fekete on March 11, 2013

What does a mobile market look like when you control 94%? Well, it depends from which perspective you look at it: the wireless player’s perspective is always different from that of the consumer. And the most recent study voicing consumer opinion just shed light on what a market without real competition means for consumers.

From the perspective of the big three, their current position on the market obviously has the benefits they were after: profits. We don’t have to go too far to understand what this means; their holiday quarter reports reveal enough data.

But what does this mean for competition? It’s an easy guess: Wind Mobile’s billionaire backer, Egyptian Naguib Sawiris, said a couple years ago that entering into the Canadian market was a bad idea. And rumours of Wind being courted by Rogers — after becoming the first fully foreign-owned wireless player in Canada — just added another “boost” to the so-called competition, just as did the Shaw-Rogers deal.

The Shaw-Rogers deal, just like the new wireless spectrum auction, questions the future of competition in the country. Why? In 2008, Industry Canada reserved a set amount in the AWS spectrum auction for new entrants, permitting Wind Mobile and Mobilicity to enter the wireless market.

Unfortunately, Rogers obtained a portion of the AWS set aside spectrum from Shaw Communications, which, as you may have guessed, gives the incumbent more power and restricts independents.

In other words, the government’s effort to create a competitive field in the Canadian mobile market seems to have reached a dead end, as the upcoming wireless spectrum auction has its own flaws: instead of setting aside spectrum, Industry Canada has opted to put a cap on the amount of spectrum incumbents can obtain, so incumbents could use their allotted amount to obtain all the high-quality spectrum.

What does the current setup look like from the consumer’s perspective? If a report from Canada’s Commissioner for Complaints for Telecommunication Services (CCTS) highlighting that consumer complaints recorded 11,000 complaints last year and the office is on track to record a 50% increase this year didn’t shed light on the current state of the mobile market, the OpenMarket.ca study surely does.

The 59-page report entitled “Time for an Upgrade: Demanding Choice in Canada’s Cell Phone Market” has plenty of “cell phone horror stories,” which Canadian mobile subscribers have shared.

Based on data gathered between October 17, 2012 and February 15, 2013 from 2,859 Canadians, the study sheds light on the current state of the Canadian mobile market from consumers’ perspectives: Canadians have no real options to choose from, and experience excessively high telecom costs, restrictive contracts, and disrespectful customer service. And the stories are from real people. You can read these “horror stories” by following this link.

The study also highlights, that owning the majority of the market leads to little incentive for service improvements. However, the CRTC is currently talking about making changes to the Canadian mobile market, and hopefully the wireless code will bring the much-needed overhaul, and we, the consumers, will finally get real choices.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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