A bitter feud between Canada’s smaller wireless firms and their bigger rivals has come to a head with three mobile phone carriers’ angry pullout from the industry’s main lobby group.
Wind Mobile Canada, Mobilicity and Public Mobile say are withdrawing from the Canadian Wireless Telecommunications Association over what they say is the group’s “consistent bias” in favour of the big three players: Rogers Communications Inc., BCE Inc. and Telus Corp.
The upstarts said in a joint news release Wednesday that they are fed up with what they say is the CWTA’s tendency to back the three dominant firms on a “wide variety of issues.
“From this point, the CWTA does not, and cannot claim to speak on behalf of the Canadian mobile wireless sector,” says the news release.
“When we first approached the CWTA, we were promised clear and fair representation on issues of true industry alignment. But despite making our objections and concerns abundantly clear on numerous occasions, the CWTA has repeatedly failed to honour this promise, leaving us no alternative but to withdraw,” said Simon Lockie, chief regulatory officer with Wind Mobile.
“CWTA rejects the accusation that the association represents the interests of only certain members,” CWTA spokesman Marc Choma said in an e-mail message.
“The withdrawal of Wind, Mobilicity and Public Mobile from CWTA is an unfortunate and surprising announcement,” he added.
“These carriers have been valued members of CWTA and have fully participated on the CWTA Board of Directors and CWTA committees since joining the association and continue to do so up until the announcement this morning.
It’s normal for any industry association with a large and diverse membership in a very competitive sector to have disagreements from time to time, he said.
A key issue of concern to the smaller players is the big three’s emphasis on self-regulation. The newer entrants say a self-regulating code of conduct does not effectively protect consumers and they have called for more transparency on such items as optional and mandatory services and contract cancellation penalties, as well as contract termination fees.
The association was supposed to act as a voice for all its members but has turned out to be mostly an advocate for Rogers, BCE and Telus, say the trio of independent carriers.
Mr. Lockie said in an interview that adequate consumer protection is just one issue among many over which the dissident group and the association don’t agree.
“The CWTA over the last few years has not focused attention on appropriate issues of industry alignment,” he said.
“That they have been lobbying against consumer protection measures that we’re in favour of is one example but it’s not the only one and it certainly is not the definitive one.”
Gary Wong, director of legal affairs at Mobilicity, said there is also disagreement over the CWTA’s position that Canadian wireless consumers enjoy competitive prices when they are actually among the highest in the world.
The decision to leave should not be a surprise to the CWTA, said Mr. Lockie.
“They heard from us many times before and we threatened to leave numerous times.”
Wind Mobile, Public Mobile and Mobilicity arrived on the scene after the federal government set aside wireless licences in 2008 for new challengers in order to inject more competition into Canada’s wireless industry.
The new entrants have faced challenges in building up strong subscriber bases despite their aggressive moves on the pricing front.
At the end of last year, Wind, Mobilicity and Public Mobile together had just under five per cent of the Canadian market, according to Brahm Eiley, president of Convergence Consulting Group Ltd.
Many industry observers expect more consolidation in the industry, as cash-strapped smaller firms get snapped up by larger rivals with deep pockets.
Wind, owned by Amsterdam-based Vimpelcom, is reportedly for sale.