Governments wrangle with reducing cellphone rates

Victoria, Ottawa float plans to cut costs for mobile service plans in Canada

Sprinkle in some survey results, add the promise of advocacy and combine with Competition Bureau recommendations.

Is it a recipe for disappointment or a recipe for cheaper cellphone plans for British Columbians heading into 2020?

Last month, the B.C. government revealed that only six per cent of respondents to its cellphone billing survey described their costs as reasonable.

Suggestions floated in the more than 15,000 survey responses ranged from boosting competition to government regulation.

While cellphone plans aren’t the domain of provinces, Victoria announced in November it was appointing B.C. NDP backbencher Bob D’Eith as an advocate to Ottawa for cellphone affordability.

The move came after Liberal Prime Minister Justin Trudeau pledged during the fall election campaign to encourage telecom companies to lower prices 25 per cent over two years. If not, he’d seek to introduce more competition into the market.

Meanwhile, the week after B.C. appointed D’Eith as an affordability advocate, the federal Competition Bureau issued its recommendations to the Canadian Radio-television and Telecommunications Commission (CRTC) for boosting competition and lowering prices for wireless services.

The bureau wants the regulator to create a mobile virtual network operators (MVNO) policy that allows upstart competitors access for five years to infrastructure owned by incumbent providers Telus Corp., Bell Canada and Rogers Communications Inc.

While the smaller competitors could offer plans as MVNOs (companies offering services through infrastructure they don’t own), they would be expected to build out their own infrastructure during those five years.

“It’s not a bad start,” said Samer Bishay, CEO and president of Iristel and subsidiary Ice Wireless, the latter of which has built infrastructure in Canada’s northern territories. “But in a way it feels like too little, too late.”

Another Iristel subsidiary, Sugar Mobile, had offered wireless services outside the North through a combination of Wi-Fi and roaming agreements between sister company Ice Wireless and the incumbents.

But in 2016, Sugar drew the ire of Rogers, which accused it of circumventing regulations because most of Sugar’s customers did not live in the northern territories and therefore weren’t considered roaming while using the incumbents’ infrastructure.

Rogers won that battle when the CRTC ruled in its favour in 2017.

The recent Competition Bureau recommendations are essentially the same MVNO model Sugar was using nearly four years ago.

“The problem is if we keep taking a year or two every time to deliberate a problem, by the time we get to the final phase of the problem we’re going to be so far behind the rest of the world that it’s not even going to be funny,” Bishay said.

“If we’re doing the same song and dance three years later, imagine how far back we are especially in an area of technology that changes on a daily basis.”

A March 2019 study from U.K.-based broadband price comparison website measured the cost of one gigabyte (1 GB) of mobile data across the globe, ranking Canada No. 179 at an average of US$12.02 per 1 GB.

India ranked No. 1 at an average of US$0.26; the U.S. (No. 182) was behind Canada at US$12.37.

Meanwhile, two of the country’s biggest providers, Telus and Bell, are awaiting word from Ottawa about whether equipment from Huawei Technologies Co. Ltd. will be allowed in the 5G networks the Canadian companies are building.

Intelligence allies such as Australia, New Zealand and the U.S. have already banned Huawei’s 5G equipment over concerns that the equipment could be used to facilitate spying for Beijing.

Rogers, however, has been building out its infrastructure using equipment from Sweden’s Ericsson.

In a February filing, Telus cautioned investors over potential delays and financial fallout if the federal government were to nix Huawei’s 5G technology.

“A decision prohibiting the deployment of Huawei technology without compensation or other accommodations being made by the Government of Canada could have a material, non-recurring, incremental increase in the cost of Telus’ 5G network deployment and, potentially, the timing of such deployment,” the company stated.

If Huawei 5G equipment and software were to be banned in Canada over security concerns, two of the country’s telecom giants would likely seek compensation for the money and resources poured into this deployment before the Chinese company was made off limits.

If no compensation is provided, those costs could fall upon consumers and add another wrinkle into government efforts to lower cellphone bills.



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