Ottawa Backing Away from Pledge to Increase the Number of Wireless Competitors

by Istvan Fekete on February 13, 2014

The government’s push for a fourth wireless player in every region is apparently losing power. Industry Minister James Moore said on Wednesday that the government will let the market decide whether there is a need for a fourth competitor, downplaying Ottawa’s earlier efforts to expand beyond the country’s three major carriers to foster competition and bring down prices.

“It would be irresponsible for us to have a public policy that wasn’t setting in place the parameters where more competition could emerge, if the market can support it,” Moore said in an interview with The Canadian Press. “Whatever dynamic emerges that the marketplace can support, the marketplace will decide that,” Moore said from Ottawa.

The government has relaxed the rules relating to foreign investment for wireless companies with less than 10% of market share, paving the way for new entrants. This, you may recall, sparked an intensive marketing campaign from the incumbents sending the message that the government would give an unfair advantage to foreign players such as Verizon. Ottawa decided to fight back with its own marketing campaign. Verizon, however, decided not to enter the local wireless market.

As Moore said, he would like the norm to reflect the situation in Atlantic Canada, Québec and Saskatchewan, where the Big Three have local wireless players to compete with, such as Eastlink, Videotron and Sasktel.

In the light of the (currently) ongoing 700 MHz wireless spectrum auction, it would be interesting to see whether Ontario, Alberta and British Columbia will get to see an emerging fourth local player. One more thing: Wind Mobile and Mobilicity are currently up for sale. The latter has received offers from multiple parties, but Wind Mobile’s fate is still uncertain, as its backer, VimpelCom, could cut financing at any time, just as it did with the wireless auction when it scrapped future 700 MHz spectrum-related plans.

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

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