Mark Evans

Does Canada Need Another Wireless Carrier? Yes!

The Canadian government plans to sell wireless spectrum next year that could set the stage for the entry of a fourth national wireless carrier. Whether it’s a coalition between Shaw and Videotron or the entry - heaven forbid! - of a foreign carrier, more competition can only be a good thing to break up the monotony of Canada’s oligopolistic wireless market in which Rogers, Bell and Telus go through the motion of competing against each other for consumers.

In reality, the Big Three are fat and happy with steady growth in a market where penetration is still less than 60%. As a result, Canada’s wireless prices are higher than rates in Europe and the U.S., which fattens the carriers’ bottom lines but does little to boost penetration. In theory, the idea of another carrier is a good thing if it means having another player will to compete aggressively for market share - even if that means using price as a marketing weapon.

Ironically, this was the role played by Microcell Telecommunications before it was acquired by Rogers - a transaction approved by the federal government and a cause for celebration within the executive suites of Rogers, Telus and Bell.. But all the Rogers-Microcell deal really achieved was the elimination of a pesky competitor that was making life miserable for the Big Three.

So let’s hope next year’s wireless spectrum auction shakes up the market and brings competition back to the market. Note: Mark Goldberg provides an overview on how the wireless carriers did in the fourth-quarter, and ends his post with these two intriguing sentences:

“There is a lot of opportunity for continued growth in Canadian wireless with penetration rates experiencing steady growth, but still well behind most of the rest of the world. Will one of the carriers break ranks to try to grab much more than their fair share of the great unserved segment?”