Yesterday, Industry Minister Christian Paradis finally announced a decision that Canada's telcos have been waiting on for a year. He said that Industry Canada has reserved 25% of its wireless spectrum for the new entrants in the upcoming auction.
Wind Mobile, for one, was not at all satisfied. The company issued a ruthless, public counterattack, stating that the government did not do enough to foster necessary growth of wireless startups and promote competition in Canada.
“The announcement creates the illusion that the government has gone all-in to create a competitive wireless landscape," says Anthony Lacavera, CEO of Wind Mobile, "when they've only done half the job."
Globealive, which owns Wind, issued a press release that reads like a furious rant:
The reality is that consumers will face higher prices, fewer choices and a return to the era of incumbent dominated wireless. […] all they've really done is stack the deck in favour of the incumbents.
“Delivering on foreign ownership is only half of the equation," a fuming Anthony continues. "We've spent countless months telling the government that caps will destroy our ability to compete with the incumbents in the next auction, thereby crippling wireless competition in Canada. The government invested in a solid foundation but now they're asking us to build a house without the tools."
"It's a simple formula," he concludes. "Without the ability to acquire 10 MHz, no new entrant can build out LTE, which means no new entrant can viably compete in the long term. This is a smoke and mirrors announcement designed to distract from the fact that they've sided with the incumbents at the expense of Canadians.”
As a result, Wind told Reuters that it's apt to boycott the upcoming wireless auction. Anthony says, as the rules stand today, there's simply no point.
However, competing discount wireless carrier Mobilicity says that it will participate in the auction. "We'll be there … bidding 100% and bidding aggressively," COO Stewart Lyons told Reuters.
Mobilicity argues that LTE can be built with the MHz the government has set aside, and believes that "lower prices, greater availability of technology, proliferation of devices" will come as a result of the government's decision. "It's good news for the Canadian wireless consumer," Stewart affirms.
Manitoba-based MTS Allstream also approved of the move.
"This is a positive development for MTS Allstream and for Canadians and Canadian businesses," said Pierre Blouin, Chief Executive Officer. "This announcement means more investment, better prices and more choice for Canadians." Pierre went so far as to say the government "should be congratulated" for their decision.
Has the government done enough or not? Will Canada's wireless industry improve or remain an iron-gripped oligopoly?
Photo: Financial Post