Telecom regulators not doing enough to promote competition in wireless: analyst

Two veteran telecommunications analysts sparred over the state of wireless sector competition at a recent conference in Toronto. Speaking at TeleManagement Live 2005 on October 18, Eamon Hoey, principal of Hoey & Associates, said the government isn’t doing enough to promote real competition in the wireless sector, noting that Canada’s wireless operators were recently ranked 27 out of 30 Organization for Economic Co-operation and Development (OECD) countries. "I think that’s embarrassing," Hoey said. "No one is really paying attention to that issue the penetration says it all." The outspoken telecom consultant also took square aim at the system access fee that wireless operators charge post-paid subscribers. Customers are required to pay $6.95 per month as a licensing fee that the carriers have said covers a whole range of charges. "We’ve had $1 billion dollars taken out of consumers’ pockets on the notion of a network access charge," Hoey said. The CRTC doesn’t regulate wireless and Industry Canada says it’s not its problem, he added. "We have three national competitors who are charging rates that are outrageous by contrast to the United States...We’re still at 47% to their 61%-62% penetration and our prices are higher. All in all when you look at the wireless industry as a benchmark for what’s happening in the rest of the industry, you can see that we are well behind, and it’s really the fault of the regulators who have overly protected the wireless industry for a number of years," he said. Lis Angus, principal at Angus Dortmans Associates Inc., took exception with Hoey’s comments, noting that the industry isn’t that far behind the United States’ wireless sector and has served the country well. She said the key is to make sure the industry continues to progress, and "we don’t stand on our laurels." Referring to Canada’s wireline service, Angus added, "I think that’s one of the reasons is because our wireline services are so good." Hoey didn’t buy Angus’ assessment, though. "We should be at least at the level of the Unites States which is around the 62% penetration level. We’re sitting around 47% penetration," he said. "If you look at the growth number of wireless in Canada relative to other countries that even have over 100% penetration, our growth rates are still lower than some of those countries," he added. HE also suggested that the country needs to start with a clean slate and begin holding carriers accountable. For example, Hoey said, "The best way to do it is in the case of Rogers , haul back the licence that they bought from Fido – let them keep the customer base if they want – but take back those frequencies and allot within six months...That’s just to start off with; you need to introduce more competition." Hoey also took aim at the lack of wireless number portability as an inhibitor to competition, criticizing the PricewaterhouseCoopers report suggesting a two-year implementation plan. "Wireless number portability is a great example of how neither one of the regulators moved...We will be lucky get wireless number portability by 2010," he said. Some of Hoey’s remarks resonated with the CRTC’s vice-chair of telecommunications Richard French. He said in a presentation at the conference that perhaps the regulator hasn’t done a good enough job in regulating the wireless carriers.

Telecom regulators not doing enough to promote competition in wireless: analyst

News | 11/01/2005 5:00 am EST

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