Innovation in Canada’s wireless industry is being held back by the lack of wholesale access to broadband networks, according to the head of a Canadian company that owns a mobile virtual network operator (MVNO) in the United States.
Incumbent wireless providers, Bell Canada, Rogers Communications and Telus Corp. have advanced wireless networks but they are not willing to resell their services wholesale to small operators, said Elliot Noss, chief executive officer of internet service provider and telecommunications company Tucows Inc. of Toronto.
This lack of unlimited high-speed broadband at a reasonable price is blocking innovation and is responsible for the slow adoption of gigabit Internet access in Canada, he said.
As an example, Noss offered up Ting Inc. which was launched in 2012 by Tucows and has since been very successful in MVNO market in the U.S.
MVNOs do not own spectrum or network infrastructure, instead they purchase network access at wholesale prices from existing operators and resell it to customer at retail prices.
In the case of Ting, the company buys broadband access from Sprint Network. Ting offers customers no contracts and charges them only for what they use. The average Ting customer pays US$21 a month.
In an interview with CBC’s news program, Lang & O’Leary Exchange, Noss argued that under current market conditions, an outfit like Ting could not operate in Canada.
He said although Ting prices are lower than those offered by larger companies, Ting is able to provide a higher level of service. Sprint on the other hand is able to make more money from Ting than the large provider is able to from its own customers, Noss said.
In order to alter current industry conditions in Canada, he said, the federal government can mandate a wholesale regime with mandatory pricing to help open the market up.
This, he said, would make small players more viable.