The CEOs of Bell and Rogers argued at the recent BMO Capital Markets telecom conference in Toronto that the government’s planned “competitive measures” for its 600MHz auction are unfair.
George Cope, CEO of Bell parent company BCE, and Rogers CEO Joe Natale came out against setting aside about 40 percent of the available spectrum for ‘non-incumbents’ like Videotron and Freedom Mobile, both of which they suggest are too large to warrant extra help.
“Two of the largest cable companies in Canada shouldn’t be subsidized by taxpayers,” Cope told investors, according to the Financial Post’s Emily Jackson.
Natale agreed, stating, “I do take issue with the fact that we’ve got vibrant capable regional players that are being classified as new entrants and being given set aside opportunities when they’re not new entrants in the classical sense.”
“Two of the largest cable companies in Canada shouldn’t be subsidized by taxpayers.”
Innovation, Science and Economic Development Canada (ISED) classifies non-incumbents as companies that have less than 10 percent of the national wireless subscriber market share — a group that includes Videotron, Freedom Mobile, Eastlink and SaskTel. Both Videotron and Freedom Mobile, however, have significant customer bases; Freedom has over 1.1 million subscribers as of the last tally and Videotron has about 920,000.
However, that’s still less than 10 percent of the overall market, which is dominated by Bell, Rogers and Telus.
The government’s proposed measures are not without precedent — the U.S. government also set aside spectrum for smaller players in its recent 600MHz auction, and the Canadian government set up a similar framework in the 2008 spectrum auction, which allowed for large buys by new entrants like Globalive (owned by Tony Lacavera, who proceeded to found Freedom Mobile, previously Wind) and Quebecor.
“I do take issue with the fact that we’ve got vibrant capable regional players that are being classified as new entrants.”
Cope argued, however, that those smaller players were upstarts in 2008. According to Cope, those non-incumbents are now well-established companies that are less deserving of extra help.
FP noted that both CEOs said they would be making their views clear to the government while it’s in the process of taking in comments, which it will continue to do until October 2nd, 2017.
Telus CEO Darren Entwistle also previously told investors he was disappointed by the government’s proposed competitive measures.
The 600MHz auction is expected to take place in approximately two years, providing Canadian carriers with a chance to nab valuable spectrum that Natale called the “lifeblood of our industry.”
600MHz is a low-band spectrum that provides significant range and is currently being used by T-Mobile in the U.S. to enhance rural coverage and expand its LTE network.
Source: Financial Post