Canada steps in to stimulate wireless competition

Thu Mar 7, 2013 2:10pm EST
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By Randall Palmer and Alastair Sharp

OTTAWA/TORONTO (Reuters) - The Canadian government said on Thursday it would start the process of auctioning more prime wireless spectrum on November 19 and announced other steps designed to stimulate competition and reduce high roaming charges.

In selling carriers the rights to use the additional frequencies for wireless service, Ottawa aims to assure at least four competitors serve each region of the country. To accomplish that, it will limit the three dominant carriers, BCE Inc's Bell, Rogers Communications Inc and Telus Corp, to three of four prime blocks in each area.

"Our government's priority is to provide greater wireless coverage at lower rates for consumers," Industry Minister Christian Paradis said in a statement.

Canada's wireless market, which has some of the highest roaming charges in the world, is dominated by Bell, Rogers and Telus, which together command a 90 percent share.

The government sought to weaken their dominance in a 2008 auction of airwaves in which it set aside some spectrum for new entrants. Among the upstarts that emerged are Wind Mobile, a carrier in the process of being acquired by Amsterdam-based VimpelCom Ltd, and closely-held Mobilicity and Public Mobile.

In another measure to promote competition, Ottawa is indefinitely extending a requirement that wireless carriers provide roaming on their network to rivals, and expanding that requirement to all carriers. When introduced in 2008, the roaming requirement, designed to make upstarts more attractive to customers, applied only to them, and for five years.

But Ottawa stopped short of requiring that networks provide so-called "seamless" roaming, a major win for the Big Three, according to Desjardins analyst Maher Yaghi.

The policy still allows calls to be dropped when a customer strays out of the coverage area, but gives the customer the right to reconnect on the roaming network.   Continued...

A student uses his mobile phone as he walks inside the Engineering building at the University of Waterloo, located beside the Blackberry maker's Research in Motion (RIM) headquarters in Waterloo April 18, 2012. REUTERS/Mark Blinch