Videotron declares “Canadians will see more competition”

If you’re thinking about Videotron and wondering where they have been hiding all this time, wonder no more. Below is an article titled “Competition drives wireless benefits” from the Financial Post that was written by Manon Brouillette who is the Executive VP, Strategy and Market development for Videotron. This article is incredibly well written, well articulated and outright unassumingly powerful.

I’ve highlighted some quotes that I thought were important takeaways… you’ll have your own viewpoints and we’d love to hear them. We’re curious what you think about Videotron an if they are poised to become a

“We are writing to comment on two items that appeared in recent issues of the Financial Post. The first item is commentary by Ken Engelhart, Senior Vice President, Regulatory Affairs, Rogers Communications (Canada Is A Wireless Leader, Nov. 12). The other item we wish to comment on is an interview by Guiseppe Valiante with Wade Oosterman of Bell Canada (Q&A: Bell Mobility’s Wade Oosterman, Nov. 4).

Mr. Engelhart commented on a number of reports that have found Canadians to trail much of the world in their use of wireless devices. Mr. Engelhart suggested that the various studies are flawed: looking at the wrong metrics, using the wrong comparisons and that the reports are coming to the wrong conclusions.

In Mr. Engelhart’s view, Canada remains a leader. He contends that when the usage statistics are viewed through the correct lens, Canadians have been well-served by the wireless industry. We agree that much has happened to improve Canadians’ wireless experience in the past year. The fact that Canadians have now two (not three — the Telus-Bell network is but one network) of the fastest wireless data networks in the world is indeed remarkable.

We ascribe the genesis of the new investment by Rogers, Bell and Telus to the positive effect of new competition. It is important to note that the motivation behind the incumbents’ investments was the necessity to defend their turfs rather than the desire to participate in a quest for world leadership and innovation. With the rapid march of new competitors to the wireless stage, the truth was that the old technologies employed by the incumbents would not suffice in the face of world-leading technology which the new entrants are poised to employ.

Mr. Engelhart neglected to mention another innovation that his company has undertaken — which was the sunset of the System Access Fee. System Access Fees are a distinctly Canadian innovation where Canadian cell phone customers pay an ‘extra’ fee to use their carrier’s wireless network. In all other countries, the network was included in the carrier’s service fees. Not so in Canada.

Mr. Oosterman made a number of points that deserve comment. Taking his points in the order they were made in the interview, his first point was that there is nothing that Videotron can do in the Quebec market that he cannot do. We concur. Our point is that Bell has not been doing so heretofore. That if Bell is going to improve its offerings, upgrade its technology, and refocus its customer service, the reason they are doing so is because the threat of competition from Videotron. They have had a century or so to learn about better customer service and a decade or more to adopt a better technology — only now are they making their customer experience and network investments. In Quebec, they are doing so to meet the Videotron challenge.

The key ingredient in the Canadian wireless marketplace in 2009, the ingredient that has fostered the investments by Bell, Rogers and Telus in network upgrades, the ingredient that has seen the elimination of system access fees first by the incumbent flanker brands, Koodo, Solo and Fido, and then by all of the incumbents — is competition. The competition that was fostered by the Canadian Government in the last wireless spectrum auction.

The Canadian government was unhappy with the services that Canadians received from the three major carriers. To address our wireless malaise, the Canadian government set aside spectrum for new entrants into the marketplace, made access to infrastructure mandatory and it also mandated roaming. Videotron’s customers will be able, thanks to vision of the government and the adjustment to the license rules, to use their Videotron wireless phones anywhere in Canada.

Canadians are already feeling the benefit of competition — Better networks, more transparent pricing. As one of the successful bidders for wireless spectrum in last year’s auction, Quebecor/Videotron promised Canadians that we will offer better pricing, more innovation and better service. These are the hallmarks of competition. When Videotron launches our HSPA+ network, Canada will then have three separate HSPA+ networks. Our service will be launched next year – Canadians will see more competition and competitive benefits.”