Telus says mandated MVNO access would lead it to cut investments and jobs

Telus has stated that if an MVNO (mobile virtual network operator) mandate goes through, the carrier will cut $1 billion in investments, remove 5,000 jobs and reduce its philanthropic giving over the next five years.

The carrier said that it has a board decision that it will table if the CRTC proceeds with its MVNO model. This goes along with Telus’ argument that mandating MVNO access would not provide any material benefits to consumers.

“Mandated MVNOs will undermine innovation and investment in Canada, whilst negatively impacting job security and creation,” the carrier said during the CRTC’s public hearing.

The Vancouver-based carrier argued that regulation is unnecessary because assessments show that the market is working properly. The carrier says that the industry is currently highly competitive.

Telus argued that the Competition Bureau’s evidence that points towards an uncompetitive market is incorrect. It noted that Rogers and Bell’s costs are going down and that as they lower their prices, Telus meets those price reductions as well.

Further, the carrier argued that mandated MVNO access would not be effective and that “studies conclude that MVNOs are niche players that do not want to compete with the incumbents. There is no disagreement on this.”

Telus also claimed that such regulation would harm Canadians, and that there aren’t any material consumer benefits, but that there are clear negative repercussions.

“An MVNO policy will create a negative investment incentive for all facilities-based providers in Canada,” the carrier said during the hearing.

Further, the commission asked Telus what type of MVNO model it would prefer. In response, the carrier’s CEO Darren Entwistle said he doesn’t believe there is “justification to move away from facilities-based competition in this country and forcibly introduce MVNOs in any of the formats that have been discussed.”

The carrier also said that the right regulatory environment for 5G deployment demands that the commission declined to mandate MVNO access. Telus noted that regulation would not contribute to the $26 billion investment needed for 5G networks across Canada.

Telus also argued that this would guarantee that 5G would not be rolled out in rural and remote areas and smaller towns.

Additionally, a continuous topic that has come up during the hearings are the national carriers’ relationships with their flanker brands. For instance, the commission outlined that Bell seems to keep its primary brand more separate from its flanker brands, which are Virgin Mobile and Lucky Mobile.

However, Telus outlined that it believes in the family of brands, which is why it says it is multi branding its stores to involve its flanker brands Koodo and Public Mobile. The carrier also outlined that its three companies are aimed at different consumers.

It noted that Telus is aimed at families and people who want premium devices with lots of data. Public Mobile is targeted towards more digital-savvy customers looking for affordable rates, and Koodo is in between.

Another topic that came up in both Bell and Telus’ hearing is the concept of ‘win-back’ offers. Telus echoed Bell’s argument and said that win-back offers are an example of a highly competitive market.

The carrier stated that it competes fiercely to keep customers and to get them back, which is part of the desire for competition in the industry. Telus said that it doesn’t believe in the justification of regulation for win-back offers.