What does Ottawa’s roaming fee pledge really mean?

Share

The federal government's vow to reduce domestic roaming costs is drawing mixed response from wireless carriers.

Some new entrant carriers applauded Ottawa's plan, which was briefly outlined in Wednesday's Speech from the Throne. The government, however, provided no details on how it would accomplish that goal beyond saying it would "take steps to reduce roaming costs on networks within Canada."

Currently, domestic roaming agreements are commercially negotiated between carriers, but small carriers complain they overpay their larger rivals for those wholesale rates. In recent weeks, many have urged the federal telecom regulator to regulate those carrier-to-carrier fees.

"It is great news for Canadian consumers that the Government committed today to following through on its promise to ensure much-needed competition in the Canadian wireless market will flourish," said Wind Mobile chief executive Anthony Lacavera. "With a pro-consumer Government and an active CRTC taking action to hold the Big Three carriers accountable, it looks like the party is over for Bell, Rogers and Telus."

Eastlink, meanwhile, has accused incumbents of using roaming fees as a profit centre. It too, cheered the government's plans.

"Eastlink supports the government in its efforts to create a sustainable environment for long term competition in the Canadian wireless market. Ensuring reasonable wholesale roaming rates is extremely important to these efforts," a spokeswoman said in an emailed statement.

But scant details about the government's plans also lead to some confusion.

Ken Engelhart, senior vice-president of regulatory affairs at Rogers Communications Inc., said he is unclear whether Ottawa plans to lower the wholesale rates that carriers pay or whether it intends to target the rates that consumers pay.

"I am not entirely sure what they mean," said Mr. Engelhart. "I guess we'll just have to wait and see what they meant over the next few days."

Josh Blair, Telus Corp.'s chief corporate officer, said his company has a "proven track record" of being able to offer reasonable rates on domestic roaming.

Earlier this year, the Canadian Radio-television and Telecommunications Commission introduced a code of conduct for the wireless industry that caps extra fees such as those charged for both domestic and international roaming.

"We do not expect telecom and cable stocks to move much on this Speech, as the key points were expected and lacking in detail. However, we believe that all carriers must be much more careful in terms of pricing on a going forward basis," wrote telecom analyst Dvai Ghose of Canaccord Genuity in a note to clients.