According to Statistics Canada, the Canadian economy gained a surprising 79,000 jobs in November, with the unemployment rate easing 0.1 percentage points to 8.5%.
The story hasn't been quite as rosy in the telecommunications sector. Rogers Communications laid off 900 at the end of November in an effort to "streamline operations" and I just heard that TELUS continues to quietly let people go with 150 full-time staff getting pink slips yesterday.
To add insult to injury, this latest round of layoffs in Canada come at a time when the Big Three (Bell, Rogers, and TELUS) continue to outsource jobs offshore.
Not only is TELUS outsourcing thousands of Canadian jobs to the Philippines, but they have established a business unit to take advantage of their world-class reputation in outsourcing call centers. Ouch.
Add to this story that fact that the Big Three are strongly opposing the entry of Globalive's Wind Mobile in the wireless space because they're not "Canadian" enough according to the Canadian Radio-television and Telecommunications Commission.
Globalive Wireless Management (Globalive) does not meet the Canadian ownership requirements set out in the Telecommunications Act. Under the legislation, a telecommunications company is only eligible to operate in Canada if it is not at any time owned and controlled, in law and in fact, by non-Canadians.
Does anybody else see the irony here? Our country has rules stating that a Company must be 80% owned by Canadians, yet the Canadian Companies that Company will be competing with are laying off Canadians and outsourcing jobs outside the Country.
Globalive currently employs close to 1,200 Canadians and have even insisted on keeping them on the payroll doing charity volunteer work while they wait to hear their fate from the CRTC.
Based on all this, should we really be surprised that Canada is falling behind in the wireless space?
Canada’s wireless industry is one of the weakest in the developing world. Merrill Lynch puts Canadian wireless penetration at 65 per cent, last among 22 developed countries (below Tunisia and Iraq). The International telecommunications Union (ITU) has tracked Canada’s decline from 35th in 1998 to 128th in 2008 – far behind many underdeveloped nations."
This isn't only about Canadian jobs. New competition in the wireless industry will lower prices, increase adoption and penetration, and lead to more companies building solutions to address consumer needs.
It's called innovation and it's time something is done about it. Globalive is speaking up this holiday season but will that be enough?
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Great article Rob. It's good to see Techvbes bring this irony to light. I have always wondered how Companies that pretend to be Canadian can layoff Canadian work force and outsource their jobs while loudly objecting to other Companies bringing innovation, thousands of Jobs and Investment into the market, just because of fear of competition and archaic rules. It's time for Canadians Corporate Giants to be held accountable.
The layoff's in Telus yesterday are just the beginning keep your ear to the ground, more will follow before the year ends..... these Companies need to stop hiding behind the "recession reason"........ they're just cleaning house and in the bargain loosing great talent.... how sad!!!
The cleaning house is bad enough but this is just insult to injury for the telecommunications industry as a whole. I hope the Globalive is able to come through. Too much has been done to let all that work they have put into it go to waste.
Nicely done.
The telco's, much like Canadian banks, operate in a regulatory protected oligopoly which lacks true free market competition. Canada's regulatory system affords them this luxury and as result the consumer suffers. Is it any surprise that Canadian's pay among the highest world wide rates for wireless services (and banking fees!). Telco's benefit from government regulation that stifles competition, indirectly thwarts innovation, and yet when it comes to managing their costs through job cuts they operate like true laissez-faire capitalists slashing and outsourcing jobs.
I don't want to make a moral argument about the cutting / outsourcing of jobs or even the archaic regulation that affords certain industries in Canada protection from real competition, I simply believe they shouldn't have the benefit of both. Consumers suffer under this scenario, employees suffer, and the real winners are shareholders...hmm...maybe I will buy some telco stock on Monday.
Jim here from TELUS. I would like to add some additional perspective on the above story.
First, TELUS does not oppose Globalive’s entry into the wireless market in Canada at all. We also have no objections to the liberalization of foreign ownership laws in Canada as long as the laws apply equally to every company. We do however believe that all companies must adhere to the laws of our country if they want to do business here. The CRTC determined that Globalive was way offside of the law. A half-dozen other new wireless entrants were able to structure themselves in accordance with the law. If they can do it then why can’t Globalive?
To ignore the law gives Globalive an unfair competitive advantage over Canadian companies. Globalive can access more foreign capital at potentially lower cost. Some of the new wireless entrants have already indicated that had they chosen to ignore the law, they would have had access to greater amounts of foreign capital which would have allowed them to purchase more spectrum in last year’s AWS spectrum auction and build out larger networks.
Mr. Lewis cites a Merrill Lynch study that suggests Canadians wireless penetration rates at 65% are a sign of weakness in the industry. That same Merrill Lynch study ranks Canada as the 4th cheapest developed country in the world to own a cell phone (U.S. = $0.05 per minute, Canada = $0.08 per minute, Europe average = $0.15 per minute, Asia-Pacific average = $0.22 per minute. Switzerland is the most expensive country at $0.28 per minute). Some European countries have wireless penetration rates of 200%. What drives some European consumers to need two cell phones for every man, woman and newborn baby especially when the cost of owning a cell phone is almost double what Canadians pay? Some have suggested that a number of factors drive this phenomenon including higher landline costs, domestic network roaming charges, and limited availability of free evening and weekend calling plans which drive consumers to subscribe to multiple accounts.
On November 5, TELUS launched its 3G+ wireless networks using HSPA+ technology. The network is now one of the fastest wireless broadband networks on the planet, spanning 1.1 million square kilometres and reaching more than 30 million Canadians. There are also 3 carriers offering the iPhone in Canada. Contrast that with the US where there is still only one wireless carrier offering the iPhone on a much slower network.
Innovation, investment and competition is very much alive and well in Canada.
@jim
Great comments! Agreed, any company wanting to do business in Canada should operate within our rules/laws. My contention is that perhaps the rules need changing. I'm sure you are well aware of the OECD's 2009 Communications Outlook report. Of all the countries within their study, the OECD notes:
"The only countries that have foreign investment restrictions in the telecommunication sector which apply to all players in the market are Canada, Korea and Mexico."
Really? We're lumped in with Mexico and Korea? We should be more progressive than this.
Congratulations to Telus for launching its new technology. This is good for consumers no doubt. I'd be curious about the discrepancy between the Merrill Lynch study cited compared to the OECD's report which demonstrates Canada's cellphone rates to be among the worst in the developed world.
http://www.cbc.ca/technology/story/2009/08/11/canada-cellphone-rates-expensive-oecd.html
Hi Michael,
Yes, we are very familiar with the OECD 2009 Communications Outlook Report. That report was issued last summer and ranked the U.S. as the most expensive country in the OECD to own a cell phone, Canada was ranked third most expensive. It’s widely accepted that cell phones are still a bit more expensive in Canada than they are in the US so the OECD study results don’t make sense.
Mark Goldberg, an industry analyst, did some analysis to try figure out how the OECD results could be so wrong and he explains it far better than I could. Please follow this link for an explanation: http://mhgoldberg.com/blog/2009/08/oecd-study-needs-reality-check.html
In a nutshell, the main problem with the OECD study was that the user baskets were designed for European usage patterns. Europeans use cell phones only about a third as much as Canadians (European average usage = 157 minutes per month, Canadian = 420 minutes per month, U.S. = 830 minutes per month, Asia Pacific = 179 minutes per month). The largest OECD usage basket defined in the study was simply way too small to reflect typical North American usage patterns which ended up badly skewing the results.
It’s also worth noting that the CRTC does not regulate wireless industry in Canada, they never have. Wireless companies are free to set their prices, introduce new technology, retire old technology, add new features, create bundles, etc. without getting approval from the CRTC. Radio spectrum is considered a public asset so Industry Canada licenses and regulates use of radio spectrum in Canada.
Hope this helps.
@Jim all well and good but what about the job losses, I'm one of those affected and its sad to see investment AND JOBS leaving this Country... and its not like I'm even remotely close to retirement.
I agree with @michael we compare ourselves with the wrong Countries and if the operators are allowed to make their own pricing models why then are we still backward and charging people for incoming calls??
The sooner these new entrants come in the better!!
@Jim
Funny your comments did not refer at all to the main subject of the article - employment. Telus lost all credibility in that area when they blocked customer access to the union website in 2005. Years of offshoring jobs has only further proved that you view your employees as an expense to be slashed. You may save a few bucks on the balance sheet in the short term, but people notice when the person who answers the support call doesn't know where Vancouver is (and lies about it). I think it is one of the main reasons Shaw is taking all your ISP business.
Good luck colluding with Bell, enjoy the taxpayer subsidized network you were gifted with and keep spending all your money on the "cute animals in an all white world" ads instead of improving service. Your disdain for your employees/customers will destroy you eventually. [Or maybe the public will wake up and realize that communications are a utility and shouldn't be run by a mafia of shitty companies.]
When I post comments on a blog I always disclose my full name, who I work for and where I got my facts. Unfortunately there is always someone who fires off a volley of personal insults and baseless allegations without any supporting facts and then hides behind shield of anonymity. I suppose those who don’t believe their own comments require anonymity the most.
@Jim
I agree with your comments about 'Mike's" contribution to the discussion...Jim, I've appreciated your engaging dialogue....In fact, I have read through the links you posted and was very interested in the critique of the OECD's report. Thank you for sharing.
Please do not confuse anonymous Mike as my own comments...we are not the same individual.
@Jim
I'd be interested in knowing exactly which of the "baseless allegations" you disagree with. As much as my comments seemed to bother you, you actually didn't dispute any facts...just tried to discredit me with bogus arguments. Am I mistaken? Did you not block access to the union website? Has the % of foreign employees not increased over the years? Do you not regularly conspire with Bell to ensure favorable CRTC rulings (not to mention now sharing a cell network)? Trust me, I believe my own comments. Unlike you, I am not paid to have an opinion. Like it or not, the topic is your company - not my identity. Sometimes the truth hurts. Sorry.
A lot of companies now are not being good Corportate Citizens, ie being responsible for the good of the community. By laying off people, even though the company is not in dire financial strain, companies are contributing more in more to the great financial woes of the world. It is a domino effect. It is understandable to layoff people when the company is heading towards bankcruptcy. But, more and more companies are taking advantage of the current economic situation by hiding their corrupt and unfair practices under the guise of layoff due to financial reasons. Companies should struggle to keep as many of their present employees in the payroll to boost the economy of the country. By laying off people, more and more people will be unemployed, less and less money will circulate in the country, forcing other companies to layoff more in more people. Left uncontrolled the country and the world will head to deeper and deeper recession and eventually to worldwide depression. Governments should encourage companies to hold on to their employees and be good corporate citizens. Even better by hiring more people.
