Canadian telecom MVNOs react to CRTC non-decision

The Canadian Radio-television and Telecommunications Commission (CRTC) decided on Mar. 22 that it would need to study and revisit the issue of whether to allow the resale of wireless services.

Industry players – specifically the small telecom players called Mobile Virtual Network Operators (MVNOs) that this decision affects – have had a chance to react, and while they recognize the need for further review to balance the needs of all stakeholders, their disappointment is clear.

Lawry Trevor-Deutsch, President of TNW Wireless, says that while he understands the CRTC’s dilemma, “at the end of the day, they are here to serve the Canadian public and the Canadian public wants lower rates.”

“Everyone – including us, the CRTC, the major telecoms – has put in about eight months of work here and there wasn’t a great deal of change. Those who benefit from the closed market argue it should be closed, and those who benefit from opening it up argue it should be open,” Trevor-Deutsch tells IT World Canada. “Clearly, the CRTC is wrestling with the decision, and I understand it’s complex. They’re kind of balancing the question of ‘how do we keep the incentives going for telecom companies to invest and build robust wireless networks?’ versus increasing competition to lower prices for consumers.”

TNW, a wireless provider with a license in northern British Columbia and the Yukon, asked the CRTC in July 2017 to compel Bell and Telus to provide it with wholesale roaming agreements so it could offer data-only phone subscriptions across Canada.

The Canadian telecom body ruled that it will conduct a thorough review of its wholesale wireless framework “in the near term”, pushing the decision of whether to allow small players to resell the services of the big telecom corporations off by at least another year.

By allowing the resale of wireless services, the CRTC would have opened the doors for MVNOs – who have no wireless network of their own – to access the wireless networks owned by larger players and resell those services as consumer data plans at a cheaper price.

“We have a tiny wireless license in northern Canada so clearly we’re not going to invest in a coast-to-coast network. But we would like to have the margins to invest in our local network, which would translate to investing in the national telecom infrastructure in our own little way. For example, we have plans to light up the Alaska Highway, which doesn’t have a lot of coverage right now,” Trevor-Deutsch explains.

He likens the telecom situation in Canada to the Netflix vs. cable debate: “When Netflix came in, there was a big outcry from cable companies saying it would kill Canadian production. But now we’re seeing Netflix invest hundreds of millions of dollars into Canadian production and offer a solid alternate service that makes consumers happy.”

Overall, Trevor-Deutsch says he is still “encouraged” that the CRTC has given TNW the opportunity to carry on its application and make a case for MVNOs in Canada.

Harsher criticism comes from TextNow CEO Derek Ting. The Waterloo-based company has created an app to offer free phone services via Wi-Fi through using software instead of traditional telephone hardware. It has recently signed a partnership with telecom giant Sprint to offer low cost wireless plans outside of Wi-Fi zones in the US, but is frustrated that it cannot do the same in its country of origin.

“The carriers in the US are very eager to work with us and to bring our innovation to the market because it brings them a lot of business, but Canadian carriers are in a completely different mindset; they’re playing defense,” Ting points out to IT World Canada. “The fact that this ruling from the CRTC basically says anti-competitive practices are okay, that’s a huge blow to any new innovation, new types of service, new market opportunities, and cheaper plans for customers. We’ll be fine because of our robust business in the US but we would love to offer the same service in our home market”

TextNow’s app has been downloaded more than 3.5 million times in Canada and despite the CRTC’s decision, it can still be used by Canadians today on Wi-Fi or paired with a data-only plan from a traditional telecom company.

But in its Mar. 22 ruling, the CRTC also decided not to expand the definition of a “home network” to include public Wi-Fi because, according to its release, there would be no way of discerning between a “service provider’s home network and all other network equipment connected to the Internet.” This move “secludes” TextNow, Ting says, from leveraging different types of agreements to bring its service to Canada – yet another obstacle in its path.

Ting says he is working with other companies in Canada offering similar services to lobby the government.

“We talk to other companies on a regular basis about combining our forces so that we’re heard by the general public and the government. We feel we’re a close-knit community and hopefully that will help coordinate our efforts,” he concludes.

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Jim Love, Chief Content Officer, IT World Canada

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Mandy Kovacs
Mandy Kovacs
Mandy is a lineup editor at CTV News. A former staffer at IT World Canada, she's now contributing as a part-time podcast host on Hashtag Trending. She is a Carleton University journalism graduate with extensive experience in the B2B market. When not writing about tech, you can find her active on Twitter following political news and sports, and preparing for her future as a cat lady.

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