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A man uses his cellphone in this 2013 file photo. (Fernando Morales/The Globe and Mail)
A man uses his cellphone in this 2013 file photo. (Fernando Morales/The Globe and Mail)

CONSUMERS

Manitoba’s reign of lower wireless prices may be over following Bell, MTS deal Add to ...

The sale of MTS to BCE for $3.1-billion plus the assumption of $800-million of debt will reduce the number of major wireless suppliers in Manitoba from four to three, and that could result in higher prices for mobile phone users in the province. Numbers crunched by regulators and analysts show that in provinces where there are more large competitive carriers with 4G/LTE networks, prices tend to be lower than elsewhere.

With about one-third or 140,000 of MTS’s substantial mobile phone customer base being transferred to Telus under the BCE takeover deal, the three remaining carriers in Manitoba (Bell, Telus and Rogers) will have roughly equal market share. Winnipeg-based MTS is the province’s incumbent telephone company and currently has about 50 per cent of Manitoba’s wireless subscribers. Rogers currently has about 30 per cent, and BCE and Telus both provide service to about 10 per cent of customers. If the deal closes, Bell will become the biggest wireless carrier in the province with about 40 per cent of market share and approximately 425,000 subscribers.

You can’t predict prices in a specific region, said Desjardins Securities Inc. analyst Maher Yaghi, but his recent analysis showed that in provinces with a three-way market balance, prices are higher on average.

In Ontario, Alberta and British Columbia, where there are just three major players (not including smaller providers with limited networks), prices for many phone plans are higher – and sometimes substantially higher – than in provinces where there are four strong mobile firms. The four-competitor markets include Manitoba, Saskatchewan (where SaskTel is a big player) and Quebec (the only province where Quebecor’s Videotron is operates).

While there are other factors, one reason the average cost of wireless in a four-competitor market is generally less is because “the oligopoly is weaker,” Mr. Yaghi said.

But MTS chief executive officer Jay Forbes argued that the deal won’t necessarily push prices higher in Manitoba.

“One could easily argue that the presence of three nearly equal size competitors may actually have a more interesting business dynamic than the presence of two larger and two very small players in the marketplace,” he said in an interview Monday.



With files from reporter Christine Dobby

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