Videotron Ltd., which plans to announce its cellular wireless service on Thursday, will be a viable competitor to Bell Canada Enterprises Inc., Rogers Communications Inc. and Telus Corp. in Quebec, a Canadian telecommunications analyst says.
Montreal-based Videotron, which is owned by Quebecor Media Inc., was one of the new entrants in Canada’s Advanced Wireless Spectrum (AWS) auction in 2008. It paid $555 million for its cellular licences but three other new entrants launched service already.
Globalive Wireless Management Corp., which uses the Wind Mobile brand name, has been offering service since December. The other new entrants who are operating right now are Mobilicity, owned by Data Audio and Visual Enterprises (DAVE) Wireless Inc., and Public Mobile Inc. All three cater mainly to consumers.
A Videotron spokesperson would not say Wednesday whether its service will actually be up and running this week, which handsets it will offer or whether it will have any plans for corporate customers, but analysts expect Videotron will offer bundles comprised of wireless, cable television, phone and wired Internet service.
“I think we can expect to see them position their new service with the other suite of consumer services,” said Lawrence Surtees, research vice-president for communications at IDC Canada. “They’re building a very comprehensive network and have been for almost two years now. (Quebecor CEO Pierre Karl) Peladeau was on the record that they were not going to do it in a hurry. They want to roll it out right.”
Surtees said the corporate market is a “tough nut to crack” for wireless carriers because national companies want all their telecommunications services on one bill and are looking for providers who can guarantee quality of service.
“The greater opportunity is to move up the value scale with wireless data and position it as ready for prime-time as a business offering,” Surtees said.
Videotron’s network will use High Speed Packet Access (HSPA), which has peak data transfer rates of seven megabits per second (Mbps).
“I definitely believe they are in a position in the east to really stoke the flame” of competition, Surtees said.
Nationwide, Bell, Rogers and Telus have about 95 per cent of the wireless market. That’s why in 2008, Industry Canada set aside some spectrum for new entrants.
But when Globalive was about to launch last year, the Canadian Radio-television and Telecommunications Commission denied Globalive its carrier licence on the grounds that it was supposedly controlled by Orascom Telecom Holdings SAE of Egypt. This, according to the CRTC, violates the Telecommunications Act, which prohibits foreign ownership. Globalive’s Canadian chairman, Anthony Lacavera, owns 80 per cent of Globalive’s voting shares. Globalive said it met Canadian ownership requirements because the Telecommunications Act stipulates that at least 80 per cent of voting shares be held by Canadians. But the Act also says a carrier cannot be “otherwise controlled” by non-Canadians. CRTC chairman Konrad von Fickenstein has said Globalive’s relationship with Orascom gave Orascom what von Fickenstein calls “control in fact” over Globalive. Orascom owns 65 per cent of Globalive’s total equity, loaned it money to launch its network, has a say in capital expenditures and gave Globalive the right to use the Wind brand, which is also used in Greece and Italy.
The federal Cabinet sided with Globalive, overturning the CRTC decision. So Globalive launched service in Toronto in December. Since then, it has added Vancouver, Calgary, Ottawa and Edmonton. Users outside those areas can still use their phones where Globalive has roaming agreements.
Once Videotron launches, Canada will have, in addition to Bell and the provincial incumbents, two national wireless carriers (Telus and Rogers) plus four new entrants. Shaw Communications Inc. of Calgary plans to launch next year. Eastlink Communications Inc., a Halifax cable provider also has spectrum. Eastlink, which is owned by the Bragg family, bought spectrum in areas it offers telephone service, including some communities in Ontario.
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