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Guest Blog: The crisis in mobile competition

This blog is written by one of our community members, Kevin Hudes, who is a PhD student at Toronto Metropolitan University in the Communication and Culture program. His work centers around how competition can encourage more affordable telecommunications services in Canada.

For nearly a decade, I have been studying all things telecommunications, and like OpenMedia, I feel compelled to speak up for those who do not have a voice at the table. I see the immense value in ensuring that the public perspective is central in shaping policy now and into the future. An important component of my current PhD research seeks to explore consumer awareness and perception of lower-cost mobile service providers and their service offerings. In doing so, I hope to gain insight into the potential for new mobile service providers to enter and disrupt the mobile industry. 

Over the past several months, telecommunications news has been dominated by the Rogers-Shaw merger, with many, including the Competition Bureau and Open Media, arguing that this mega-merger will likely harm competition. These harms to the competitive landscape are particularly significant for the mobile industry, as the ability to sustain the competitive inroads made by Freedom Mobile are at best unclear, and at worst, unfeasible. While it is true that Quebecor, Freedom Mobile’s new owner, has made commitments to sustain competitive pressure, there is still skepticism that these commitments will translate to any real price savings for consumers

With the Rogers-Shaw merger firmly in the rear-view mirror, a competitive environment once gridlocked by regulatory uncertainty, is now predominantly congestion free. As such, certain regional mobile providers have begun to more seriously consider the wholesale arrangements promised by the CRTC’s 2021 mobile wireless decision. In simple terms, the CRTC’s 2021 intervention grants smaller regional providers the opportunity to share the mobile networks of Bell, Rogers, Telus, and Sasktel (the incumbents) through commercially negotiated wholesale agreements. 

Although this model of increasing competition has many advantages, it still remains to be seen whether these commercial negotiations will allow for smaller regional providers to compete in the mobile market quickly and aggressively. From the CRTC’s perspective, if wholesale rates (i.e., the price smaller regional providers pay incumbents to share their networks) are set correctly, smaller regional providers should be able to deliver demonstrably affordable mobile services to Canadians in rural, remote, and urban centres, forcing Canada’s “Big Three” providers to lower their prices or risk losing customers. 

This ideal market scenario, however, is founded on three speculative beliefs . First, Canadian consumers are aware that these low-cost alternatives exist, or will exist in the near future. Second, Canadian consumers will perceive these new mobile services in a positive light. Third, once available, Canadian consumers will actively switch to these low-cost options. If any of these conditions are not met, the “Big Three” will continue to exercise market power to the detriment of the public interest. 

A Competition Crossroads

Canada is at a unique moment in the history of mobile competition. The development of a successful wholesale access regime that advances the public interest, will ensure that the most vulnerable citizens are able to meaningfully participate in an increasingly technologically dependent society.. In times like these, the public interest should be the central concern for policymakers. Unfortunately, under previous regulatory regimes, this has not always been the case. 

Against this backdrop, I invite you to participate in a short 10-minute survey about your perception and awareness of low-cost mobile services already available in the market. This study will seek to explore if wholesale access providers will be able to compete in the mobile market by looking at how certain alternative mobile providers are perceived by Canadians. The data generated from your responses will inform my PhD research project, “Mandated Competition: The Implementation of Hybrid Mobile Network Operators in Canada”. To be eligible to participate, you must pay for your own cell phone bill, and be currently living in Canada. This survey has been reviewed and approved by the Toronto Metropolitan Ethics Board (REB 2022-497), and your participation in this survey is completely voluntary. If you have any questions or concerns, you can contact me directly at [email protected].

City image by Aditya Chinchure from Unsplash.

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