Brad Shaw is the CEO of Shaw Communications Inc., the parent company of Freedom Mobile.
When Shaw Communications entered the wireless marketplace in 2016, we did so with a promise to deliver to Canadians more choice, increased competition and greater value for their hard-earned dollars. We’re proud of the disruption we’ve created in the industry in less than four years – and we want to do more.
The most recent analysis by the Canadian Radio-television and Telecommunications Commission (CRTC), the industry regulator, found that between 2016 and 2018 prices of mobile packages dropped an average of 28 per cent overall. For those packages that featured unlimited voice, text messaging and five gigabytes of data (in other words, a very standard package), prices fell as much as 35 per cent.
And new research this month by Abacus Data that was commissioned by Shaw found that three out of four Canadians say there are better deals available today than when they signed up for their most recent wireless plan.
These falling prices over such a short period of time have been driven by one force: competition from regional providers that built their own wireless networks.
Shaw’s Freedom Mobile and other regional providers have invested billions of dollars in networks to provide Canadians with an alternative to the Big 3 carriers – Rogers, Bell and Telus. Since 2016, Shaw alone has invested $4-billion – more than 25 per cent of our market capitalization – to provide better choice and greater value for Canadians.
While effective competition from regional providers is driving down wireless prices, the CRTC began hearings Tuesday into proposed policy changes that could grind that consumer-friendly progress to a halt.
At issue is a proposal to create new regulations that will require wireless resellers – known as mobile virtual network operators – be given wholesale access to existing wireless networks. Instead of building their own networks, these regulated resellers would simply repackage and resell wireless plans running on existing infrastructure. The thinking is that bringing these players into the market will lead to more affordable plans – but it’s an idea built on a faulty premise.
It ignores a couple of key facts. Regional competitors have already enhanced competition and have been the catalyst for lower prices. Secondly, since resellers don’t add to overall network capacity, they lack a critical component for pricing innovation and driving sustainable competition.
By leveraging our own network, Freedom Mobile launched the highly disruptive Big Gig plans in 2017, marking the first time a Canadian wireless carrier offered that much data (10 gigs) at such a competitive price ($50). The Big Gig permanently changed how Canadian wireless packages are priced, and most wireless providers now offer similar large data plans.
The hard truth is that regulated resellers will hurt long-term competition and erode the health of Canada’s wireless networks. While resellers invest absolutely nothing in network upgrades, they will drain subscribers from regional competitors, rendering them unable to maintain their current level of network investment. Ironically, the Big 3 would still make money, as resellers pay them for network access.
The threat of resellers is worrisome, as we sit on the cusp of the incredible promise of 5G connectivity. Canadians would be best served by a dynamic 5G ecosystem with strong regional competitors building competitive 5G networks. We now face a momentous choice: enter the 5G era with healthy competition at the outset or return to the dominance of the Big 3 with a static, uncompetitive wireless market.
Regional providers have built networks that deliver lower wireless prices and greater value to Canadians. Ottawa needs to let us keep doing just that.