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A stack of mobile phones. (Thinkstock/Thinkstock)
A stack of mobile phones. (Thinkstock/Thinkstock)

Quebec a model for wireless competition Add to ...

Montrealers don’t have it easy these days.

They pay some of the highest municipal taxes in the province – on top of Quebec’s lofty personal incomes taxes. And for what? For collusion-priced public works done by firms whose integrity is so tarnished that Montreal mayor Michael Applebaum surveyed citizens to know if they want the potholes repaired by scandal-plagued firms or if they would rather risk losing their hubcaps while driving through the city. As the debate rages on, a dozen centimetres of snow blanketed the weather-damaged streets of Montreal over the weekend.

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With their shovels still within reach, Montrealers are a miserable bunch. But there is a silver lining to living in Sin City, arguably small. Montrealers have real competition for their wireless services, and their monthly bills aren’t as outrageously expensive as the ones paid by Canadians living outside Quebec.

The Conservative government, in despair over its failed but honest attempts to instill competition in the wireless sector, could find some solace in Montreal. This is where Quebecor first launched its wireless services, in September, 2010. At last count, its Vidéotron affiliate boasted more than 400,000 subscribers province-wide. By giving Bell, Rogers and Telus Corp. a run for their money, Quebecor has become the sought-after competitor that can break the three incumbents’ hold on rates and services.

Things are not perfect, mind you. Vidéotron conveniently opted not to compete on international roaming fees. The poor fellow who forgets to put his phone in plane mode while travelling overseas will still be in for a heart attack when he opens his bill.

Looking at the latest CRTC data on average wireless revenue per user in Quebec, Sophy Lambert-Racine, telecom analyst at the Union des Consommateurs, believes things have improved. The average monthly bill had gone down to $50.36 a month in 2011 from its peak of 2009 and is on par with where it stood in 2007. Quebec boasts the lowest wireless prices in the country, with an average bill that is 13 per cent cheaper than in Ontario and 49 per cent cheaper than in Alberta.

Vidéotron, of course, is no wobbling telecom upstart. While it is a newcomer in wireless like Mobilicity, Public Mobile and Wind Mobile, the cable company is a heavyweight in Quebec. But Vidéotron might not have had so much success had the provincial government not enacted new rules in 2010 that make it easier for Quebeckers to break their service contracts and switch suppliers.

To end the abusive practices of the wireless triumvirate, Quebec imposed limits to the prohibitive termination fees, which cannot exceed the value of the handset subsidy and fall over time. Moreover, these fees need to be clearly identified in the services contract. And when wireless providers change the terms of their contract midway through, consumers can walk away penalty free.

Three provinces have followed Quebec’s lead (Manitoba, Nova Scotia and Newfoundland and Labrador), and Ontario was about to do the same when elections were called.

Of course, one could argue that it is more important for Ottawa to save the wireless upstarts, by ensuring incumbents don’t drag their feet when competitors want to use their networks. As well, the government needs to prevent the sale of the newcomers’ spectrum, the radio waves that carry wireless services, to incumbents such as Telus, which is eyeing Mobilicity, according to Globe sources. We all remember what happened when Microcell Telecommunications (Fido) was sold: Consumers got plucked.

But if the wireless upstarts have a hard time attracting customers who are trapped into long three-year contracts, they will never gain the scale that will allow them to become competitive and financially viable. This is a vicious circle that needs to be broken.

It is against this backdrop that the Canadian Radio-television and Telecommunications Commission (CRTC) launched a proceeding in October to establish a national code of conduct for wireless providers. While mandatory, this code wouldn’t be accompanied by penalties for the faulty carriers as in the provincial regulations. As such, it has been viewed by some as a watered-down version of the provinces’ consumer protections.

Wireless incumbents have welcomed a code that could even out Canada’s patchwork of regulations. However, they may live to regret the new code, whose definitive version will be known later this year. Under Jean-Pierre Blais’s leadership, the CRTC has taken a strong pro-consumer stance, as the rejection of Bell’s first acquisition proposal of Astral made crystal clear.

The national code may well turn out to be more stringent than Quebec’s consumer protections with talk of service contracts that are limited in time. The CRTC might also ban the sale of locked handsets, a double penalty as wireless providers already slap termination fees on the phones they sell.

Canada can only hope so. Only when consumers can roam between service providers will the country’s wireless industry become truly competitive.

Follow on Twitter: @S_Cousineau

 
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