Telecom execs praise ‘healthier,’ ‘balanced’ regulatory environment

Representatives from BCE Inc. and Rogers Communications Inc. described a favourable relationship with regulators at a CIBC investors conference Wednesday, where they also addressed competition between the largest telecoms. “It’s healthier in that there’s a desire for two-way dialogue with us and the regulator. Many years ago, with the previous government, we were frustrated that that dialogue didn’t exist and I believe it does today,” Bell chief financial officer Glen LeBlanc said in response to a question about spectrum auctions. LeBlanc noted that doesn’t mean every decision is favourable to Bell, giving the example of the government implementing set-asides in wireless auctions. Innovation Canada -- which has regulatory oversight over spectrum -- chose to set aside 43 per cent of the spectrum in the 600 MHz auction for regional competitors and potential new entrants. Incumbents have been arguing that imposing set-asides in the upcoming auction of millimetre wave spectrum (mmWave) would be harmful to the development of 5G. Rogers’ chief financial officer Tony Staffieri echoed those comments when he was asked about the CRTC’s initiative to force telecoms to offer lower-priced data-only wireless plans. “I think the regulatory environment we’d describe as well-balanced. We see the things the regulators are trying to do to ensure healthy competition, but at the same time it’s clear they’re very appreciative of facilities-based competition,” he said. Staffieri also spoke about the upcoming auction, noting that the company bought significant amounts of 700 MHz spectrum back in 2014 and said as a result, the 600 MHz is “less critical for us.” “And if you think about a 5G world, it’ll be the subsequent auctions that focus on the higher spectrum bands that increasingly will become important as well.” The executives also talked about competition in the market. Staffieri denied there’s been a meaningful ramp-up in wireless competition, despite a short period in December that saw the big three drop prices on 10 GB plans to match an offer by Shaw Communications Inc.’s Freedom Mobile. Shaw’s president said in January that being able to offer Apple Inc. devices made Freedom feel like a new business. “I would say in general we’ve seen the competition not change much,” Staffieri said. “There was a bit of a spurt… last fourth quarter, and that was really owed to one of the players, Freedom in particular, getting the iPhone.” He added that Freedom has been competing in the Canadian marketplace, including in its earlier incarnation as Wind Mobile, for 10 years. “So I wouldn’t describe anything unusual or different in terms of competitive intensity,” Staffieri said. Quebecor Inc. CFO Jean-Francois Pruneau gave a few additional details about the flanker brand the company began testing earlier this month, saying the company will officially launch the service within a few weeks. “The launch of Fizz is clearly a way for us to attack a segment of the market… the flanker brand market, especially. And we think that the way we’re going to be launching, and the strategy behind the launch of this new service is quite unique. An all-digital mobile service is quite unique.” Pruneau also said Quebecor is hoping to capture 25 per cent of the wireless market share. “We think we have all the tools to do that, starting from the bundling capabilities we have,” he said, noting the company only has one other competitor who can offer bundles in the Quebec market. He added that the content the company owns is also an advantage. He said it’s found the churn rate among wireless customers who have access to, and watch, its Club Illico streaming service as part of their wireless plan is half that of non-users. The company has also been making a push in the Ottawa market in recent months. Pruneau said its penetration there is low because it was, until recently, offering service at Ontario prices. “At the end of the day, we’re happy with the Quebec market pricing structure, so why not use the same pricing structure in Ottawa?” he said. “That’s essentially what we did.” Pruneau was also asked about the company’s network sharing agreement with Rogers. He said the agreement has been good for both companies, even though they haven’t always seen eye to eye on everything. “It’s just normal. It’s normal in a couple to experience some issues,” he said. “There’s things we don’t like in the agreement… and our goal for the next generation is to improve the agreement for both of us.” He added the deal “as it is now provides for some parameters that will help in bringing our relationship further with the 5G network, but it doesn’t provide for everything. So there are things to be negotiated, which we are doing right now. But I really think that we would both think the network sharing is a good thing and we will do whatever we can to make it work.” Pruneau also said Bell’s ongoing fibre-to-the-home (FTTH) build in Montreal is “not the end of the world for us,” given Videotron has other advantages to offer customers, such as French-language content from Quebec. “We are the local brand. We have the local content,” he said. Bell’s LeBlanc also gave an update on that build out, saying it’s is 15 to 18 per cent completed. He said the company will continue FTTH builds in various parts of Canada and that in the next year and a half, it plans to roll out a 5 Gbps internet service. LeBlanc also spoke the adoption by its competitors -- Rogers in Ontario and Videotron in Quebec -- of the X1 platform for their upcoming IPTV services. “It’s a great product. It’s a platform that’s been proven and I think ultimately now starts to catch up to the Fibe TV platform, frankly. We’ve had a substantive product advantage and product quality advantage, and this is closing that gap.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Kyle Duggan at kduggan@thewirereport.ca

Telecom execs praise ‘healthier,’ ‘balanced’ regulatory environment

News | September 26, 2018

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Telecom execs praise ‘healthier,’ ‘balanced’ regulatory environment

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