Analysts welcome regulatory certainty after WiFi MVNO decision

The CRTC decision Thursday not to mandate roaming for WiFi-first mobile virtual network operators (MVNOs) brings predictability for large telecoms, financial analysts said. “At the highest level, we believe the CRTC struck a very supportive tone with respect to facilities-based competition and ensuring the wireless industry has continued regulatory certainty,” wrote RBC Capital Market analyst Drew McReynolds in a note late Thursday evening. Instead of mandating WiFi-based players, the CRTC directed large telecoms to offer low-cost data-only plans, in addition to setting new roaming rates that large wireless carriers charge smaller ones, and accelerating its review of its wholesale wireless framework, which will include a review of MVNOs. McReynolds also said that while the new data-only plans will negatively affect incumbent telecoms, those changes will be manageable. The “conditions imposed by the CRTC with respect to network technology and availability (and potentially data allotments) could introduce a degree of re-price in the market which would put some downward pressure on growth,” McReynolds wrote. Aravinda Galappatthige, analyst for Canaccord Genuity, said he believes that while the lower roaming rates will provide some savings for Shaw Communication Inc.’s Freedom Mobile, “given rising data usage (40-50% per annum) we believe this would be offset over time.” “Further, we understand that much of Freedom customer’s roaming is on network, hence the impact on and would be negligible,” he added. Desjardins Capital Markets analyst Maher Yaghi said that even though they’ll be paying lower roaming rates to the Big Three, Freedom and Quebecor Inc.’s Videotron are unlikely to change what they charge their users. Yaghi said that in “essence, the CRTC is giving incumbents a two-year head start to move in a more positive direction on affordability before potentially intervening. We believe incumbents are likely to try to meet the CRTC in the middle over the next two years in order to avoid forcing the CRTC’s hand to introduce more restrictive policy decisions.” Though not everyone had a glowing review. In an op-ed for the Globe and Mail, University of Ottawa professor Michael Geist wrote that this decision might not have been what minister Navdeep Bains had in mind when he called for a reassessment of the issue. “Not only did the Commission sidestep wireless competition concerns with this latest decision, but last month it also rejected a request for a public inquiry into aggressive telecom sales tactics, essentially telling concerned consumers to look elsewhere for relief,” wrote Geist.

Analysts welcome regulatory certainty after WiFi MVNO decision

Brief | March 23, 2018

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Analysts welcome regulatory certainty after WiFi MVNO decision

Brief | March 23, 2018

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