CRTC sets interim domestic wholesale roaming rates that reinforce status quo

Last week, the CRTC set interim domestic wholesale roaming rates for carriers utilizing competitors’ networks within Canada.

Aimed at ensuring Canada’s smaller networks, and burgeoning MVNOs, are able to offer affordable national 3G access to their customers, the rates, which are not public, are reportedly in the range of 40 percent higher than the incumbents’ network costs.

In late 2013, Industry Canada changed the Telecommunications Act to prohibit carriers from charging one another more than what they charge their own customers for access to their data networks. This resulted in companies like Wind Mobile being able to charge significantly less for accessing larger carriers’ networks, but not low enough to compete on a national level. At the time, the Harper government’s intervention was a stopgap measure while the CRTC, the national telecommunications regulator, finalized its plans for wholesale domestic roaming rates.

Today, the CRTC’s interim rates are certainly lower than what the Telecommunications Act mandates, but likely aren’t low enough to disrupt the industry. Wind Mobile, one of the likely beneficiaries of lower rates, charges about $0.05 per megabyte as part of its “Away Zone” add-ons, which allows customers outside of its home areas to make calls, send texts and use data. Those numbers have not changed in some time, though, and should drop once the Big Three carriers, Rogers, Bell and Telus, tweak the amounts they charge their roaming partners.

@christinedobby domestic roaming is also driving Rogers CAPX lower via ExtRoaming From The Globe and Mail: https://t.co/uFNkNF384G

— TowerGuy (@tower_Guy) December 9, 2015

But industry experts say the lower costs will also benefit companies like Rogers, which has aggressively plugged holes in its own national network with so-called Ext-Roaming deals. Though Rogers has strong network penetration in most of Canada, its presence in Newfoundland and Labrador, Saskatchewan, and parts of Nova Scotia and PEI, is less robust than in Ontario, Quebec and Alberta.

Reciprocal roaming agreements with Bell, Telus, SaskTel, Eastlink and others allow incumbents to boast virtually limitless coverage, and smaller regional players to advertise national coverage without prohibitive investments in their networks.

The CRTC has a loose goal of mid-2016 to finalize wholesale domestic roaming rates, but in the meantime any consumer-facing pricing changes will be modest at best.

[source]The Globe and Mail[/source]