MVNO access proposal ‘burst of oxygen’ to some potential entrants

As the CRTC signals it’s ready to make an about-face on its approach to mobile virtual network operator (MVNO) network access, prospective MVNOs are eyeing the regulator’s proposal with mixed levels of enthusiasm. The head of an MVNO that operates in the U.S., which has been looking to sell services in Canada for years, is welcoming it with some caution. Elliot Noss, the CEO of the Toronto-based domain registrar Tucows -- which operates Ting, a U.S. MVNO that works off of Sprint Corp. and T-Mobile US, Inc.’s networks -- said he’s probably “less excited than most” and is taking a wait-and-see approach. “Obviously we would be thrilled to see a mandated MVNO in Canada. We would be at the front of the line if we could be. We think it’s the right thing to do,” he said, noting he plans to intervene in next year’s mobile wireless framework review proceeding. But he said he also appreciates that there’s a “huge delta between pronouncement, decision and implementation.” Meanwhile Samer Bishay, CEO of Iristel Inc.’s Sugar Mobile, said the proposed change is reinvigorating. “It’s a step in the right direction,” he said in a phone interview. “It’s that burst of oxygen I think we all needed as non-incumbent players to keep going,” he said. “We know it’s going to take some time but it reinforces our thoughts all along that change is needed.” Last week, the CRTC changed its long-held position on granting MVNOs mandated wholesale access, taking a “preliminary view” they should have access to the networks of national wireless providers -- BCE Inc., Rogers Communications Inc. and Telus Corp. -- until they are able to establish themselves in the market. The CRTC’s notice of consultation, posted last week, says the proposed new mandated network access would be eventually “subject to a phase-out period as market forces take hold,” but did not specify when that would take place or how long that would be. Noss said it doesn’t make any sense to him that the CRTC is considering introducing mandated MVNOs only to later phase out the policy. “I didn’t understand it,” he said. “I don’t know how anyone would expect a business to invest in a new market, build up a base of customers and then have your business phased-out.” But Bishay said the directional change is “good enough for now.” He noted some Canadians still can’t afford mobile phone plans and suggested the policy change could bring people into the market, and he thinks incumbents might warm up more to wholesalers in the process. Sugar Mobile was at the centre of a CRTC proceeding that looked at mandated access for WiFi-based MVNOs. The regulator ruled against Sugar Mobile, saying that telecoms weren’t required to grant it wholesale access to their networks because public WiFi doesn’t count as a home network. Ottawa then told the CRTC to reconsider its decision -- which it did, only to decline to mandate access by WiFi-based MVNOs again last year. Incumbents and smaller providers expressed serious concerns in that proceeding. Xplornet Communications Inc.’s intervention said “reversing a well thought out policy of not mandating MVNO access” could lead to the “possible failure of smaller wireless carriers and to a decline in CAPEX expenditures by the larger carriers.” Bell wrote additional access rules would “inevitably result in less network investment and less network deployment available for carriers seeking access.” Shaw Communications Inc. warned it would “undercut the plans and services of new, facilities-based carriers.” In a statement provided to The Wire Report about the new MVNO proposal, a Telus spokesperson said the company plans to “participate fully” in the next wireless review consultation. “We will reiterate our belief that Canada’s regulatory environment needs to both inspire brisk competition and encourage the billions of dollars in network investment required to sustain Canada’s place in the global digital economy and put Canadians first.” A statement from Rogers said Canadians currently enjoy “some of the best and fastest networks in the world thanks to the substantial investments by Canada’s national wireless carriers and a regulatory environment that supports facilities-based competition.” “As we enter the world of 5G, this backdrop is essential to ensure Canadians continue to enjoy the world’s best networks and all that 5G has to offer.” Bell and Shaw did not respond to a request for comment. Xplornet’s vice-president of communications and public affairs, James Maunder, said his company is “still reviewing” the commission’s MVNO proposal, but welcomed the new proposed CRTC directive and its “objective of promoting competition, innovation and higher quality internet.” The CRTC’s MVNO proposal landed just days after Innovation Minister Navdeep Bains announced a new proposed policy direction for the CRTC and tabled it in Parliament last week. That new directive will still have to go through a consultation period, but sends a signal consumer issues will need to be at the centre of the regulator’s decision making. Desjardins analyst Maher Yaghi wrote in a note Friday he believes it is “no coincidence” the directive was issued just a few months before the next federal election. That’s something a number of telecom insiders and observers also pointed to, along with the ongoing SNC scandal, when speculating about the sudden flurry of consumer-focused messaging from the government and surrounding telecom policy direction. — With reporting by Kyle Duggan at kduggan@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

MVNO access proposal ‘burst of oxygen’ to some potential entrants

News | March 4, 2019

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MVNO access proposal ‘burst of oxygen’ to some potential entrants

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