La Presse has today an interesting article (in french) about what awaits Videotron in upcoming months. The author, Maxime Bergeron, says that at an upcoming auction, Bell, Rogers Wireless and Telus are most likely to block any new player in Canada by paying the high price. They did it in 2001 by paying Ottawa $1.48 billion, blocking effectively any new startups.
As reported earlier this year, Pierre-Karl Peladeau and his group Videotron announced their intention to enter the mobile industry. They are currently a virtual mobile operator, but are ready to invest to build their own telecommunications network and become the 4th mobile telecom provider. A prerequisite for that move is to get a license and a spectrum from the CRTC and the federal governement, which plans an auction at the end of this year, and where 100 Mhz are to be sold to the highest bidder.
I have to say I have no pity for Videotron and their claim for more competition. As the reporter says, this market gets telecom companies $1 billion a month, and each of these companies proved in the past that they were just interested in maximizing profits, for each given subscriber. If there was a legal way for them to be the sole player in the mobile industry, they would gladly do it and put their competitors out of business. In the current battle, Videotron says Canada needs more competition and frequencies should be “reserved” for new entrants like Videotron and MTS AllStream, while Telus, Rogers and Bell all announced that the market should be free and fair for everyone, with no governement rules. It’s true though that Canada needs more competition, more innovative products and offerings, and even bolder companies with affordable data plans so that subscribers could actually use their cell phones for something else than calls. I have already wrote about it. I think now that what Canada needs is maybe an outside player, maybe a company from Europe or Asia who might bring some alternative strategy that actually works both for customers and companies alike.
Comments
mbrunet September 04, 2007
12$ for 1 Meg … come on! (Fido)
Denis Canuel September 04, 2007
Also, one thing I don’t get (or I should say – that Videotron doesn’t get at all) is why bother? I have a feeling we’ll all be on Wifi within a few years and cell phones will be a thing of the past. Ok perhaps I’m exaggerating but not very much…
Then again, maybe that’s why the president mentioned that it will be too late if they wait for a few years (in the likely event that they can’t get their frequencies)
Carl Mercier September 05, 2007
We -really- need more competition in the telecoms market. It’s so expensive, it’s pathetic.
Heri September 05, 2007
Denis Canuel: as KPP said, there is an oligopole in Canada, and it’s not a true free market. in a free capitalistic market, new players can enter competition, without any barriers. AND THATS THE BIG PROBLEM IN CANADA. i consider it’s a legacy from the 80s.
also, about the future, who knows? i would bet on wimax. but we still need mobile phones coverage for areas outside of big cities, like in northen Québec. so this is still important.