Entwistle sounds off on wireless competition

Telus Corp. chief executive Darren Entwistle has never been shy to lash out at those who criticize the state of competition in the Canadian wireless industry and he didn't hold back during the company's third quarter financial and subscriber results conference call last week. The last question of the call queried the CEO about strategy and tactics around the upcoming spectrum auction and how the company would proceed if the rules favoured new entry. "I don't subscribe to the rationale for the government to set out or facilitate or subsidize because I think the government's already opined in terms of their view as to how the market should be managed and how they should not interfere with the proper development of the market," Entwistle said. He said the state of the industry and the competitive rivalry that already exists should give the government comfort that it doesn't need to implement policies specifically promoting more entry. The Telus CEO highlighted Canada's wireless pricing as evidence that action to encourage entry is not required. "We've got the lowest prices for consumers and business amongst the G7 countries as it relates to economic value of wireless for subscribers," Enwistle said. "If you look at the meaningful level of penetration - the percentage of people over the age of 15 in Canada having a cell phone - it's 75% and that's growing at 475 basis points to penetration year in and year out." The Telus CEO questioned the merits of determining level of competition based on the number players in the market. "What's so magical in a number?" he asked. "What is the preoccupation with four versus three? And why do we define the quality of competition based on a number like four? I think the quality of competition should be determined by affordability, the degree of innovation in the marketplace from a product development perspective, the competitive intensity making sure that we have fair rates...and just how sustainable is the competition."Entwistle highlighted the high-speed Internet market in Western Canada as an example of why the greater number of competitors doesn't equal greater competition. He described the high-speed Internet access sector there as being an effective duopoly yet the region has the second highest household high-speed Internet penetration in the world. But if the government does decide that it needs to specifically facilitate the entry of new players, he stated that the company is ready to compete and has already demonstrated that it can succeed in a four-player market."I think what you can expect from us effectively is more of the same," he said. "We'll push hard on wireless, we'll push hard on data across wireless and wireline, we'll invest prudently for the future to support those growth tenets."

Entwistle sounds off on wireless competition

News | November 5, 2007

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