Primus arguing for greater regulation of wireless carriers in WNP context

Primus Telecommunications Canada Inc. has told the CRTC that it should institute winback rules so that the collective dominance of the country’s three national operators can’t thwart competition. The following is an edited excerpt of Primus’ March 6 reply comments. In their comments, Bell Canada, MTS Allstream, SaskTel and Telus argued that the current ILEC winback restrictions should not be extended beyond their current scope. These carriers argued that the wireless industry is competitive and accordingly there is no need for winback rules. From its perspective as a new entrant mobile virtual network operator (MVNO), Primus submits that while it may indeed be the case that any one wireless carrier is unable to dominate the wireless market in Canada, it is certainly the case that together as a group, Rogers Wireless, Telus and the Bell group as well as the wireless operations of SaskTel and MTS Allstream, do dominate the wireless market in Canada. Primus would also like to highlight the fact that in addition to their dominant status in terms of both subscribers and revenues, these companies have effectively leveraged their scope and scale through various inter-company arrangements that enable them to buttress that retail dominance. For example, in its latest annual report to the Governor in Council, the commission states that: The limited availability of licensed spectrum has constrained the industry to a few players. These players have focused on the retail market, entering into agreements with each other which enabled them to maximize coverage while minimizing capital expenditures. These players also offer subscription plans that include handset subsidies. These factors reduce the incentive for wireless resale. As a result, the wholesale market is small. The importance of these agreements, which permit nation-wide coverage while minimizing expenditures on telecommunications facilities, cannot be over emphasized. The Inukshuk joint venture between Bell Canada and Rogers Communications is another example of how advantageous inter-company agreements enable wireless carriers to buttress their market position. Although there is no one wireless carrier that dominates the wireless market, the combined market shares of Rogers Wireless, the Bell group and Telus, coupled with the various inter-company arrangements noted above and the lack of comprehensive wireless wholesale regime have created a powerful and essentially exclusive group of incumbent wireless companies whose presence creates significant challenges to the long term success of new MVNOs. Primus reiterates its call for the extension of winback rules to the major wireless carriers in a effort to afford new entrant wireless service providers the breathing space they need to establish themselves and enable them to enhance the competitiveness of the wireless market beyond current levels. Primus also notes SaskTel’s statement that the number of wireless subscribers has increased dramatically in the past few years. While that is the case, Primus submits that the number of wholesale alternatives for independent competitive service providers has actually decreased. The disappearance of Clearnet and Microcell has eliminated two key potential vendors for MVNOs and has further consolidated market power in the hands of the few national wireless carriers. This consolidation is another key fact that underlines the need for winback restrictions on the wireless carriers.

Primus arguing for greater regulation of wireless carriers in WNP context

News | March 22, 2006

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