Wireless competition in Canada

We’ve been monitoring the many discussions, blog postings and articles about the state of wireless competition in Canada over the last few years.

As consultants and analysts who strive to look at things from a customer viewpoint, we find the comments, observations and perspectives to be quite interesting and wonder, as usual, if the wireless industry has even considered the customer view and impact.

The opinions about the competitive state vary from one side, where there the belief is we have the right number of cellular providers, to the other, that we don’t have enough cellular providers to provide a truly competitive environment for Canadians.

Having participated in numerous CRTC regulatory hearings for telecommunications competition in the early ‘90s, we see some similarities, and differences, between then and now. We’ve also seen the positive and negative effect of competition on us as business customers, and on the industry as a whole.

Effects of Telecom Competition

Positive Effects

*Substantial reduction of rates for most long distance services (60 cents per minute, down to 3 cents per minute, depending on call volume for basic long distance)

*Reduction in most data communication services rates (20 to 50 per cent reduction, depending on services)

*Development and deployment of multiple high speed data communication services such as MPLS, DSL, ADSL and extended Ethernet with more bandwidth for the buck than prior to competition

*Deployment of next generation wireless data and voice services such as EVDO, GSM, Wi-Fi, Wi-Max, etc.

Negative effects of Telecom Competition

*Financial pressures have increased due to lost revenues from long distance and other legacy services. Newer services do not have the same margins or profitability as previous legacy services which has added additional financial pressure

*Caused a focus on increased ‘productivity’, which really means the reduction of costs of operations of telecom providers. Many of the providers have reduced costs through massive head count reduction

*Customer service has been negatively affected, for both the consumer and enterprise customer base, by the head count reduction and the trend to outsource customer service offshore

*Decreased investment and innovation – the previous structure of fixed rate of return enabled providers to investment massive amounts of capital, since they were ensured a guaranteed rate of return. Competition appears to have resulted in less investment capital being available which has directly affected innovation

Linkage to wireless competition

We currently have multiple wireless national providers offering various voice and data wireless services. From our analysis the rate plans are very similar with little or no major variance in price competition available by customer segment.

Many of my peers have commented on the lack of price competition from Canadian providers compared to various U.S. counterparts. We don’t track the U.S. market at a detailed level, therefore we’re not able to comment to any extent.

Our only comment would be related to the lack of flat rate plans for voice or data services within Canada compared to the U.S. We believe this type of plan would drive an increase in both consumer and business subscribers and provide revenue growth.

Linkage to Innovation from competition

It appears that our current wireless providers offer similar handsets as the U.S. with a slight delay (about three to four months, not counting the iPhone). Where we’ve seen a difference related to wireless innovation is in a broad range of wireless applications being deployed within focused industries within the U.S. and other parts of the world, i.e. transportation/logistics, retail, agriculture, etc. We’re not sure why there is this difference, and would welcome thoughts and feedback for this area.


We don’t believe competition and innovation is driven by a certain number of wireless providers being in a market. Instead, we believe it is tied to the vision, strategy, investment capabilities and willingness of the suppliers to truly be real innovators and competitors, rather than a herd of ‘me toos’.

Perhaps we as customers should speak up more about our needs and wants and start using our purchasing power to influence the wireless suppliers to encourage and reward innovation and competition.

I hope you have found our thoughts of value, educational, enlightening or at least humorous, and feel free me at Roberta J. Fox at [email protected] or 905.473.3369 x 1001 to discuss further.

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Jim Love, Chief Content Officer, IT World Canada

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