The SeaBoard Group, a Montreal-based telecommunications consultancy, isn't known for holding back on its unhappiness with federal telecom policy. Today it threw another log on the fire it has built at the feet of the Harper government over its long-overdue policies on the upcoming spectrum auction rules and foreign telecom ownership.
SeaBoard's witty and sometimes acerbic managing director Iain Grant has insisted for some time that the government ensure incumbent carriers don't overwhelm new operators like Wind Mobile, Public Mobile and Mobilcity in the auction and that it toss away any limits on foreign ownership. The 42-page report repeats these arguments, but with additional weapons suggesting there still isn't enough wireless competition here.
For example, it notes that in a recent investment note Bank of America Merril Lynch predicted Bell Mobility and Rogers Communications will likely follow the lead of Telus Communications Corp., which recently raised its rate of its entry-level Koodo brand by $5 a month when it added voice mail and calling party ID as a bundle. It also shifted to per-minute billing, effectively increasing its rates.
How much competition can there be, the SeaBoard report asks, if the investment community foresees no pressure on publicly-traded carriers to hold back from rate increases?
The report also wonders why the new operators can sell unsubsidized handsets for less than the carriers, who presumably have better buying power. For example, Mobilicity and Wind sell the BlackBerry Torch 9810 for $499.99, while Rogers sells it for $549.99 and Bell and Telus sell it for $599.99. Mobilicity sells the HTC Amaze for $549.99, Wind sells it for $569.00 and Telus for $599.99.
And should we feel sorry for the incumbents who have to build networks across a vast country? No, says SeaBoard, which offers figures from the big three's financial reports suggesting their capital and operating expenses are less than carriers in the U.S.
Doubtless Bell, Rogers and Telus have been sending their own appeals to the cabinet.
I've said before that the government is between a rock and a hard place. Having already leaned over for new entrants in the last auction, it would prefer not to do it again. I suspect, however, it knows Wind, Mobilicity and Public Mobile are too fragile at the moment to do that.
Meanwhile, we await word from the Prime Minister and Industry Minister Christian Paradis.
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