Canada’s telecom regulator is opening the door a crack to more wireless competition, by allowing a small number of regional companies to launch national wireless services piggybacking on the networks of the established players.
The Canadian Radio-television and Telecommunications Commission said Thursday that regional telecom providers with their own established networks in Canada will now be allowed to effectively offer wireless services in areas of the country where they don’t currently operate.
They will be able to do so by becoming Mobile Virtual Network Operators or MVNOs — companies that buy access to other networks at wholesale rates, and then resell them to consumers.
True MVNOs have no spectrum, towers or wireless infrastructure of their own. That allows them to offer wireless services at far cheaper rates, in general, because they don’t have to bear the cost of establishing and maintaining the infrastructure.
Companies must have existing Canadian networks
They are major players in places like the U.S. and Europe, but thus far they have not been allowed to operate in Canada.
“Regional providers that invest in network infrastructure and spectrum will be able to offer competitive services to millions of Canadians as mobile virtual network operators in areas where competition is limited,” the CRTC said.
“These companies have already been contributing to greater competition and helping to lower prices.”
The move would apply to smaller companies with regional wireless networks, but who have thus far have not invested in creating national networks due to the prohibitive cost.
While this opens the door a crack to MVNOs, it has not been completely kicked in. The CRTC says the only companies who will be allowed to become MVNOs must have existing Canadian networks.
A purely foreign MVNO such as Mint Mobile — which is owned by Canadian Ryan Reynolds and has 15 million customers in the U.S. but was forbidden from offering wireless services to Canadians under previous rules — will not be mandated access.
The new rules do say that a foreign MVNO could find a back door into Canada by working with Canadian regional players willing to resell their MVNO access, but that would have to be negotiated on a case by case basis.
The regulator isn’t mandating any companies to allow that.
CRTC wants to accelerate competition
The move also comes as Ottawa is considering the massive proposed merger between Rogers Communications and Shaw Communications, which will see the second largest wireless company in Canada buy the fourth largest, which could lessen competition.
On the whole, Canadians pay far more for wireless services than consumers in other countries.
“While there are encouraging signs that prices are trending downwards, we need to accelerate competition and more affordable options for Canadians,” CRTC chair Ian Scott said.
“The competitive model we are introducing today will result in greater choice and cheaper mobile wireless services for Canadians, who rely on their smartphones now more than ever.”