April 15, 2010 8:30pm
Today Tony Lacavera, Chairman of Globalive and WIND Mobile took the stage and spoke at the Empire Club of Canada. His topic was called the “21st Century Canadian Telecommunications: The Way Forward” and basically addressed the industry, his challenges and Canada’s opportunity.
There was obviously much talk about foreign ownership and how the Big Three (Rogers, Bell and TELUS) have his organization on their radar and doing what they can to call them anti-Canadian. Lacavera stated “To call us anything but Canadian would, quite simply, be untrue. But, that’s the kind of fear-mongering that the incumbents would like to seed in order to continue their anti-competitive hold on the Canadian telecom market. A market that has under served Canadian consumers for a decade and one that has been hamstrung by a national oligopoly and provincial duopolies.”
Lacavera went on to speak about how the Big Three rake in the profits with the average Canadian pays over 2.2 times per minute than customers in the United States. In addition, he said our wireless network lags behind other countries with our penetration level at 67% compared to 89% in the U.S. and over 100% in Europe.
So Globalive saw an opportunity when the government had the Wireless Spectrum Auction. He decided to seek out investors and the soap opera of Egyptian-based Orascom Telecom began. Months later with the reversed CRTC-decision behind them but still very much in the public eye – Wind Mobile has invested over $800 million, employs over 700 people and stores open in Toronto, Calgary, Ottawa and Edmonton (Vancouver is coming next).
“Competition is alive and well in Canada!” Lacavera stated. “The launch, although highly hailed by consumers, has also seen its fair share of early barriers” such as they have been unable to secure any Canadian investment and even though it’s Industry Canada’s policy to mandate tower-sharing, they’ve made over 100 requests and have yet to successfully share a single tower with any of the incumbents.
At the end of the speech Lacavera said “If we can’t fund it on our own backyard, then we have to allow for foreign capital… If we’re serious about competition to provide greater benefits for Canadians then we have to allow the free market to work”. In order for this to happen he stated if Canada wants to compete in the global market and foster the development of Canadian content, there must be 3 major policy changes:
1. Liberalize current foreign ownership rules
2. Facilitate access to foreign capital for telecommunications
3. Move forward with a policy review on the separation of broadcasting content policy from telecommunications.
All these are big changes and will take a while to come to fruition. In the meantime, Wind is active in the market and competition is increasing, prices are slowly falling and hopefully – eventually – those 3-year contracts will be history.