Industry Minister Expected to Announce Wholesale Roaming-charge Cap

by Istvan Fekete on January 10, 2014

James Moore, Federal Industry Minister, has scheduled an important announcement for today, Friday, which could see him announce a cap on the wholesale roaming charges previewed in the government’s fall Throne Speech.

Speaking with the Toronto Star, an Industry Canada spokesman said that Mr. Moore will “make an announcement about consumer choice and better services in the wireless market.”

However, this was enough for analysts to start speculating about what the Industry Minister will announce today. According to Cannacord Genuity head of research Dvai Ghose (who is often cited by the media) Moore may reveal the mandated wholesale rates incumbents will be allowed to charge competitors using their networks. This is expected to replace the pricing negotiated between the wireless players.

“We do not believe the announcement will be directly related to the 700 MHz auction” which is due to begin on Tuesday, Ghose said, referring to Ottawa’s upcoming sale of wireless spectrum licenses. In our view it is too late to make changes, and we believe that a further delay in the auction is highly unlikely.”

The government has sent out clear messages lately – especially since the media war began between Ottawa the incumbents – in which it publicized its plans to better protect consumer interest. As it turns out, the government will also amend telecommunications legislation to cap the wholesale rates charged by the incumbents to smaller players.

Wholesale roaming rates have captured the headlines recently: new entrants such as Wind Mobile have argued that incumbents charge them too much, often more than the Big 3 charge their own customers. This prevents smaller players from offering more choice, lower prices, and better service.

“While cheaper domestic roaming could help new entrants, we wonder how many will be left to take advantage and whether it will really make much difference to industry dynamics — Public Mobile was recently acquired by Telus and Mobilicity is operating under CCAA,” Ghose added. “We believe that cheaper domestic wholesale roaming could merely result in cheaper roaming fees for Videotron and EastLink when their customers travel out of region.”

There is a catch though: if the government opts for (too) low roaming rates, it cuts the incentive of wireless startups to build their own networks and use their own spectrum. This, however, doesn’t seem to be Ottawa’s aim.

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

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Amendments to the Telecommunications Act Put Cap on Wholesale Roaming Charges — TheTelecomBlog.com
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