The federal government unveiled yesterday the final rules for next year’s May auctions, which are largely in favour of new companies in the wireless industry. 40% of the new 105Mhz wireless spectrum will be reserved for new entrants, and existing telecommunications companies are to share their existing infrastructure with these new players.
This might just be the week’s biggest news; and certainly a big win for Canadians, one that will change their practices and how they will use their cell phones. More competition means plans (especially data plans) will be more affordable, and more Canadians will be able to use mobile services. It’s also a big sign for technology entrepreneurs and mobile software developers who can (finally) reach a local market.
Previously, it was nearly impossible to launch a mobile carrier in Canada due to costs and regulations which required any mobile carrier to cover most populated regions on Canada. This had the consequence of raising fixed costs for carriers, and thus raised prices of plans and services offered to subscribers.
On the telcos front, Bell Canada, Telus and Rogers are officially scandalized, while Videotron and regional players praised the federal governement for the move. They should understand though that if prices are going down, we will get a more flexible market, much more active users, and this will be good for everyone, for Canadians and telecom companies alike.
StartupNorth has also an enthusiastic post by Thomas Purve and comments about the news.
Comments
Stephane Daury November 29, 2007
James Golick November 30, 2007
Carl Mercier November 30, 2007
Prices are outrageously high here, I sure hope it helps bring them down.
Heri November 30, 2007
james, you are right, because we will have to wait till 2009 to see things change. but i know for sure the only way for videotron to get customers is to into a price war with the other telcos. that’s their only option, and as i said, this will be great for us customers
Fagstein » What is a wireless spectrum auction? December 01, 2007
[...] perhaps notable that two blog posts I’m linking to about the announcement by Industry Canada that part of the wireless [...]
Montrealer January 02, 2008
What is likely to happen is that the remaining 50MHz spectrum will not be enough for each of the ‘big threes’ to get enough (capacity constraints due to Spectral Efficiency). So at least two of them will have no choice but to share infrastructure assets, at the minimum.
In the end, this will favor consolidation rather than competition.
Good intentions are not enough when you want to have your cake and eat it, i.e., spur competition from national players without the minimal required financing clout, yet shy away from confronting public outcry for doing the only thing that could stimulate more competition in Canada: open-up the market to foreign firms with deep pockets.
All the rest is ideology and demagoguery.
Final day for wireless auctions at Industry Canada | Montreal Tech Watch March 11, 2008
[...] Canada suprised everyone last fall whey they announced that 40mhz of the total pool would be reserved for new carriers — read MTS AllStream, from Manitoba, and Videotron Inc., from [...]