Fireworks to erupt at CWTA forum

Attendees at the Canadian Wireless Telecommunications Association (CWTA) forum on the advanced wireless services spectrum auction today are likely to see some fireworks early in the afternoon. One session will explore wireless pricing and penetration in Canada with another considering the terms and conditions for the auction. Penetration and pricing have for the last number of years garnered a significant amount of attention with both sides of the debate pulling out facts and figures to back up their claims. Pierre Karl Péladeau, president and CEO of Québécor Inc., recently fanned the flames on the debate when he described some of the deficiencies of Canada's wireless sector in a speech last Tuesday to the Canadian Club of Ottawa. Canada's 58% penetration rate "reflects the fact that the average wireless customer in Canada pays 33% more than Americans for the same service. Heavy users in Canada pay 56% more than Americans," according to Péladeau's speaking notes. "The only price advantage in Canada is for those who almost never use their devices - who have them only for emergencies and usually leave them in a purse or in the glove compartment: these people pay 27% less than Americans." Péladeau was referring to a SeaBoard Group report released earlier this year that compared the average prices Canadians pay for wireless service with subscribers in the United States and some European countries. Telus Corp.'s Michael Hennessy criticized the report in an interview with Report on Wireless last month. The CWTA has also released a Wall Communications critique of the SeaBoard Group report. The session on the spectrum auction rules is also going to be the scene of some intense debate. Péladeau said during his visit to Ottawa last week that Québécor would like to participate in the auction and eventually build a network in Quebec, but only if the conditions are right, "and if those terms allow for the development of an economically viable alternative to the existing operators." In plain terms, this means Industry Canada must set aside spectrum for new entrants or these budding new players will be outbid by the deeper-pocketed incumbent wireless carriers. Many contest that setting aside spectrum distorts the market because it lowers the cost of spectrum and could possibly lead to uneconomic entry of a competitors. They suggest that the department won't do this and besides there are other ways to encourage entry without reserving spectrum for new entrants. The consultation paper (DGTP- 002-07) has proposed a spectrum and tier structure that should give potential regional players some confidence that they could win spectrum in their serving territory. Report on Wireless will be at the conference all day and will report back to subscribers on April 24.

Fireworks to erupt at CWTA forum

News | April 23, 2007

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