The federal government’s push to lower roaming rates in Canada is having an impact as some new entrant cellphone carriers have begun slashing rates for voice, text and data.
The Canadian Radio-television and Telecommunications Commission does not currently regulate prices in the wireless industry, but this spring the government legislated interim caps on the rates companies can charge their competitors to roam on their networks, which is known as wholesale domestic roaming.
Many observers expect the CRTC will set even lower rates once it completes an investigation this fall into the overall state of competition in the market. But some carriers aren’t waiting and have already started introducing more attractive roaming offers at the retail level.
Toronto-based Wind Mobile will announce new rates on Thursday, reducing what it charges for voice calls and texts when customers roam outside its network. The company plans to significantly cut charges for data roaming to 5 cents a megabyte, down from $1.00 a Mb.
Simon Lockie, Wind’s chief regulatory officer, said that once the government’s interim caps on roaming rates came into force, the company has “been moving quickly to pass those savings on to customers.”
Wind, which operates in major cities in Ontario, British Columbia and Alberta, is also upgrading to HSPA+, or 3G service, instead of the 2G service it previously offered customers when they used their mobile devices outside of its 3G network.
Mr. Lockie said the company had to offer roaming service on the older-generation network because 3G coverage allows users to download so much so quickly that customers quickly racked up prohibitively expensive data roaming bills.
Eastlink Wireless, an Atlantic Canada carrier owned by Bragg Communications Inc., said in July it struck a new roaming agreement with one of Canada’s dominant three carriers that allowed it to greatly expand its coverage. It also recently launched nationwide roaming plans, some of which include unlimited calling across the country, and data packages that can be used outside of its home network coverage area.
The Halifax-based company already had a long-term roaming agreement with Rogers Communications Inc. and recently struck deal with one of the other two incumbents, Telus Corp. and BCE Inc., although it would not name the specific partner. (BCE owns 15 per cent of The Globe and Mail.)
Eastlink Spokesman Dan MacDonald said the terms it was able to negotiate were made possible by the sense that change to roaming rates is inevitable.
The federal government made it mandatory for the incumbents to allow new entrants to roam on their much larger, national networks as part of a policy designed to encourage competition in the wireless industry. However, smaller carriers complained they had trouble negotiating favourable roaming agreements.
Ottawa’s interim rules – which came into force on June 19 – now require wireless carriers to sell competitors access to their networks for no more than what they charge their own retail customers on average.
Those rates are not public, but in a letter posted in early August the CRTC said that based on aggregate information it collected over the course of its review, the industry-wide average roaming cap is 8.1 cents for every minute of voice calling, 1.1 cent for text messages and 3.7 cents for every Mb of data.
If the CRTC does in fact regulate wholesale roaming prices after its hearing this fall, the rates it sets could be a major factor in Quebecor Inc.’s decision to expand its wireless business. Quebecor won spectrum licences outside of Quebec in this year’s public auction for the airwaves used to build cellular networks and has said it is prepared to expand if it can count on “fair” roaming rates.
“Unless the CRTC/Industry Canada establishes a rate in the $0.005 to $0.01 per megabyte range, we do not believe fresh capital will be committed by Quebecor or its partners to [a fourth competitor],” Scotia Capital Inc. analyst Jeff Fan wrote in a research report in July.
The CRTC hearing is scheduled to start Sept. 29, final written submissions are due in mid-October, and the commission will issue a ruling up to four months from that date.