Regional carriers say wholesale roaming rates hurt their business

Regional carriers MTS Inc., Saskatchewan Telecommunications Holding Corp and Tbaytel are asking the Canadian Radio-Television and telecommunications  Commission (CRTC) to make adjustments to existing wholesale roaming rates because fee limits imposed by the regulator allow dominant wireless service providers to take advantage of their smaller competitors’ networks.

The CRTC has been investigating if wholesale roaming rates or rates that mobile carriers charge other wireless companies when their customers roam outside their home networks, introduces adequate competition in the market. Earlier this year, the federal government capped the wholesale costs at no more than what carriers charge their retail customers.

At the CRTC hearing this Thursday, the regional carriers argued that the cap is hurting their business, according to report in the Globe and Mail.

BCE Inc., Telus Corp., and Rogers Communications Inc. have already built their own networks in territories where regional carriers operate  but are also now allowed to roam on the networks of the regional carriers on discount rates, according to Dan Topatigh, chief executive officer of the Northern Ontario carrier Tbaytel.

The caps were meant to assist new entrants increase their coverage and negotiate lower roaming rates for use of the networks of larger players.

“High domestic roaming rates hold back many providers, especially new entrants from offering more choices, lower prices and better services to Canadians, Industry Canada Minister James Moore said last year when the government announced it was moving towards capping roaming rates. “The roaming rate that Canada’s largest wireless companies are charging domestic providers can be more than 10 times what they charge their own customers.”

The regional carriers now say that the cap can also work to the Big Three’s advantage.

For example when a Telus customer roams on the MTS network Telus pays the capped fee to MTS.

Regional carriers are asking CRTC to consider exempting operators with less than 10 per cent of the national market share from having to allow BCE, Telus and Rogers pay the capped rates for using their networks.

Meanwhile representatives from BCE urged the CRTC to refrain from setting wholesale rates and move back to a system commercial negotiation for wholesale roaming agreements.

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Nestor E. Arellano
Nestor E. Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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