Competitive landscape much different if Fido was still independent

There has been a lot of talk lately about the competitiveness of the Canadian telecommunications market, not only on the landline side but also in the wireless sector. Rumours continue to circulate that Maxime Bernier, the Minister of Industry, is going to somehow allow for the creation of a fourth national wireless operator as a way to spur competition in a sector that some believe to be a comfortable oligopoly. Report on Wireless believes that much of the discussion today around competition in the broader telecom market, not just in the wireless sector, would be virtually non-existent if the Competition Bureau had said no to the acquisition of Microcell Telecommunications by Rogers Communications. When Microcell, the operator of the Fido brand, launched its unlimited CityFido landline substitute in October 2003, competitors jumped all over the diminutive carrier for offering a service that would kill the industry. Perhaps such a wireless package didn’t make sense for their businesses, but it did for Fido: it had exited bankruptcy protection earlier in the year, shedding nearly $2 billion in debt and leaving it with a clean balance sheet. In the months that followed CityFido’s launch in Vancouver, people flocked to the service and the evidence of its impact on the market is still being felt today. About 10% of Vancouver households have eliminated the landline completely and are now wireless-only homes. If Fido had been allowed to continue to expand its home phone replacement program to other cities in the country, the other three wireless carriers would have had to follow suit and offer a similar service.We would have a vastly different market today if this had been allowed to play out, but the Competition Bureau never gave it a chance. The opinions expressed in this editorial are those of the author and do not necessarily reflect those of Decima Reports.

Competitive landscape much different if Fido was still independent

News | December 14, 2006

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