Four Wireless Carriers Aren’t Sustainable in Canada, Rogers CEO Says

by Istvan Fekete on July 25, 2013

It appears that Canadian incumbents don’t like the idea of Verizon entering the mobile market. After the Telus CEO’s warning of a ”bloodbath” in the event the U.S.-based red carrier will be treated like a startup, it was the time for Rogers Communications’ CEO to raise his voice against it. But this time he also questioned the sustainability of the federal government’s proposed rules (via The Star).

After releasing the company’s second quarter financial results, Nahir Mohamed shared his thoughts about the move that trembled the stock price of Canadian incumbents: Verizon reportedly bid $700 million on Wind Mobile and opened up talks with Mobilicity.

Rogers CEO welcomes competition, he just wants a level playing field. From his perspective, Verizon’s bid on wireless startups would give the telecom giant an unfair advantage, hence it would create a stacked playing field in Canada.

“What we’re absolutely against is a tilted or stacked playing field where you have a massive incumbent U.S. carrier that would be given favourable treatment, and frankly better treatment than Canadian incumbents,” Mohamed said Wednesday.

Industry Minister Christian Paradis has rejected the Telus-Mobilicity deal, citing the federal government’s commitment to create a competitive market: Ottawa wants to have at least four wireless players in each province, and it is working hard to create the conditions necessary to have a fourth national carrier.

When James Moore took over as industry minister earlier this month, he reinforced Paradis’ earlier claims, saying the government favours increasing competition to provide consumers with better prices and more innovation.

Now, according to Mohamed, the government’s will to have four carriers in each of Canada’s regions is not sustainable. Furthermore, he claims this is something specifically Canadian, for globally the norm is three wireless carriers in one country.

“I’ve never seen how a four-player market can work in a country like Canada,” Mohamed said, noting Canada’s “geographic expanse. I’ve never thought of it as a sustainable model. If you think of what has happened in Canada consistently over a period of time, it has been proven out that in this country it’s difficult enough, frankly, to work with three players.”

Mohamed’s reaction to the rumoured Verizon entry is very similar to that of Telus CEO Darren Entwistle. Now it remains to be seen whether Bell’s CEO will use similar words. Probably, yes.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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