CRTC Starts Hearing to Examine Wholesale Mobile Wireless Services

by Istvan Fekete on September 30, 2014

This week will be a busy one for the CRTC, as it will investigate the country’s wholesale wireless mobile services market. The hearing has been preceded by a report on the current state of the market, which found aspects that don’t necessarily back up competitive claims: although the market share of incumbents dropped 1% last year compared to 2012, they still control 90% of the wireless market.

Since the small carriers rely on the network built by the Big Three when their customers travel in areas outside their coverage, their pricing packages depend on the wholesale roaming price the incumbents charge them. A previous investigation revealed that incumbents sometimes charge their smaller rivals higher rates for using their infrastructure, so in the light of a possible fourth national wireless player, wholesale roaming rates have become a timely question that needs to be solved as soon as possible.

The first organisation to participate in the hearing was the Competition Bureau, represented by Patrick Hughes. He said the outsized returns the Big Three are making from their wireless divisions are evidence that the market is “distorted”.

“We ask why the incumbents are doing this. What’s the incentive? The incentive to us are the margins in the retail market,” Mr. Hughes said. “This… is not in the public interest.”

It’s a fact that incumbents have spent billions of dollars building the infrastructure to deliver wireless services across the country. They have this advantage, but Ottawa has been pushing for a competitive market, so in 2008 there was an auction of network licences, which prompted the creation of a handful of small wireless carriers.

In his opening remarks, CRTC chairman Jean-Pierre Blais said the commission had not yet made up its mind about whether the wireless wholesale market is competitive or not:

“We have not come to any predetermined views,” Mr. Blais said. “Competition in the wireless industry benefits Canadian society in many ways, including by providing access to high-quality networks, innovative services and reasonable prices.”

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

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