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The CRTC’s decision paves the way for cheaper cellphone bills, but Canadians may still have to wait

The CRTC’s decision paves the way for cheaper cellphone bills, but Canadians may still have to wait

The CRTC’s decision paves the way for cheaper cellphone bills, but Canadians may still have to wait

The CRTC’s decision paves the way for cheaper cellphone bills, but Canadians may still have to wait

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In a much-anticipated decision, the Canadian Radio-television and Telecommunications Commission has set out terms and conditions for a policy aimed at increasing competition and lowering prices for mobile wireless services.

The decision released Wednesday will govern Canada’s next mobile virtual network operator (MVNO) regime, which will give regional players access to major networks at wholesale prices for seven years while they build their own.

The regulator stopped short of setting specific tariffs. But the incumbents must now begin negotiations in good faith with regional stakeholders at their request. If the companies cannot reach an agreement on commercial terms, the CRTC will oversee a rate arbitration process.

“We are one step closer to implementing our policy that will allow regional providers to offer wireless services in areas where competition is limited,” said CRTC Chairman Ian Scott.

“This will help provide more affordable options to millions of Canadians while increasing competition. We look forward to the large providers negotiating in good faith and reaching an agreement with regional wireless providers as soon as possible.”

The CRTC said mobile prices in Canada — often labeled as the highest in the world — have already fallen in recent years, with the average monthly cost of a 5GB mobile package dropping 11% between 2016 and 2021.

Pierre Karl Péladeau, CEO of Montreal-based Quebecor Inc., which is pushing the MVNO regime to help establish subsidiary Vidéotron’s wireless footprint outside Quebec, said the CRTC’s latest decision strengthens Videotron’s ability to launch.

“We hope the owners will act in good faith, quickly negotiate the terms of a wholesale access agreement and allow Videotron access to their networks as soon as possible,” Péladeau said in a statement.

In a conference call with analysts in May, Peladeau he said the big national telcos had so far been reluctant to negotiate wholesale MVNO deals, suggesting they were putting up roadblocks to thwart competition.

The following month, it was announced that Vidéotron would buy Freedom MobileWith wireless operations in British Columbia, Alberta and Ontario, Shaw Communications Inc. and Rogers Communications Inc. in a transaction to facilitate the merger.

The $2.85 billion acquisition of Freedom is subject to approvals from Innovation, Science and Economic Development Canada and the Competition Bureau.

Maher Yaghi, a telecoms analyst at Scotia Capital Inc., said the CRTC’s decision will please MVNO hopefuls like Quebecor, who said the wireless sector regulator requires access to networks to have “right-of-way functionality” so that calls are not lost when users move. and outside coverage areas.

“People today didn’t want handoff and going forward inclusion will make it easier for consumers to appreciate MVNO service,” he wrote in a note Wednesday evening, noting that the “hard handoff situation” was Freedom’s problem. premiered and was based on the network coverage of the headlines.

“We could see this decision providing minimal support to companies like Quebecor if they decide to require additional coverage for policyholders in certain areas without knowing that customers are being served by another provider,” Yaghi wrote.

While new entrants will need to deploy a public mobile home network and actively sell wireless services to retail customers, they will not need to have a minimum share of spectrum to get started. The first item would delay the entry of Cogeco Communications Inc., analysts said, because the company does not have a commercial operation in place.

Jerome Dubreuil, a telecoms analyst at Desjardins Securities, said the CRTC’s terms and conditions could be positive for Quebecor, based on recent pricing. But he doesn’t expect a quick launch from MVNO operators.

This week’s decision represents a step towards establishing new competitors, analysts say, but the “most important update” will be rate negotiations between regional operators and incumbents.

“Indeed, while the rates are unknown, it is impossible to assess … the impact of the regime on the Canadian wireless landscape,” Dubreuil wrote in a note to clients. “We don’t expect MVNOs to launch this year.”

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