They didn’t shoot face-to-face, but one of the country’s biggest incumbent wireless carriers and an upstart fired shots at each other at the close of a telecommunications conference.
The separate speeches by George Cope, CEO of Bell Canada and Anthony Lacavera, chairman of Wind Mobile, at the Canadian Telecom Summit in Toronto on Thursday were a perfect reflection of the divided visions in the wireless sector and the tough choices Industry Minister Christian Paradis has to make this year on the rules for the upcoming spectrum auctions and liberalizing foreign telecom ownership.
Lacavera (pictured) said that Ottawa has to change foreign ownership rules to allow new wireless companies like his access to more investment for building their networks.
The huge amount of capital needed isn’t available here for building a national network, said Lacavera, whose company spent over $400 million buying spectrum in 2008 covering much of the country.
“More importantly,” he added, “the business interests of Canadian banks with the incumbent operators make it virtually impossible to access capital on the scale required to compete nationally.”
Three hours later Cope hit back.
“Every time one of the players who’s internationally financed talks,” he added, “they’re always talking about how much bigger they are than BCE” — a reference to Wind’s financial backer, VimpelCom, which has annual revenues of about US$21 billion.
Cope insisted new entrants like Wind, Quebec cable company Videotron, a division of Quebecor Inc. and Western cableco Shaw Communications, which hasn’t launched its wireless service yet, are well funded and don’t need protection.
He also cautioned that foreign investors might be fair weather friends. After the tech bubble burst in 2000, a number of U.S.-based carriers including AT&T, Verizon and Sprint sold their investments. “When industry got tough, the Canadian companies stayed and the foreigners left,” Cope said.
Cope insisted Ottawa can’t liberalize foreign investment rules under the Telecommunications Act for carriers without changing the Broadcasting Act, which regulates the Canadian content obligations of distributors like telcos and cable companies. Most observers believe the Broadcasting Act is too politically hot to touch because of the Canadian content issue.
But Lacavera said the issue is boosting the Canadian content going through the wired and wireless networks of carriers, not the ownership of the pipes.
Lacavera said Ottawa should prevent incumbent carriers from buying any spectrum at the upcoming 700 MHz auction, accusing them of squatting on the spectrum they already have.
“It’s embarrassing,” he said. “They have way, way more than they need……We have to stop that nonsense.”
Meeting reporters after his speech, Cope said Bell needs more spectrum to deal with the expected increase in demand for video over mobile devices.
Carriers are eager to get spectrum in the 700 MHz band to deploy the next generation Long Term Evolution (LTE) high speed data services. Bell and Rogers Communications will start LTE service in selected cities by the end of the year, while Telus Corp.’s commercial service will start early next year.
Cope insisted the auction should be open to all with no setaside or caps. Noting that there will be less total spectrum available in the 700 MHz range than there was in the 2008 auction, he said capping or setting aside spectrum for the new carriers would only mean less of it to go around. That, he added, would imperil the ability of carriers to spread LTE into non densely-populated areas.
“Quite frankly, [widespread deployment of] LTE does truly hinge on the auction rules,” he said.
It’s a warning executives at Rogers and Telus have already made, one that was dismissed by Lacavera. If there’s a business case to deploy LTE in rural areas then incumbents will find a way, he said.