Sugar Mobile – a new provider offering cheap wireless service using a combination of WiFi access and cellular roaming – is already facing opposition from Rogers Communications Inc., one of Canada's Big Three carriers.
Sugar Mobile is affiliated with Ice Wireless – a company that operates a wireless network in Canada's northern territories – and it is attempting to leverage that relationship to offer cut-rate mobile services across the country.
Ice Wireless has roaming agreements with Canada's major carriers so its customers can access mobile services when they travel outside of the territories.
Sugar Mobile says that, thanks to a regulatory policy the Canadian Radio-television and Telecommunications Commission (CRTC) released last May, it can also take advantage of those roaming agreements and offer service to its customers anywhere in Canada.
The company officially launched a $19-a-month mobile service in mid-January, offering customers who own "unlocked" smartphones (i.e. devices not tied to a particular carrier) a SIM card and unlimited calling, texting and data usage when connected to WiFi. The offer also includes 200 megabytes of cellular data, for which it relies on Ice Wireless's roaming agreements.
But in a complaint to the CRTC filed on Monday, Sugar Mobile says Rogers plans to "disconnect both Ice Wireless and Sugar Mobile from roaming on Rogers' network." The startup provider has asked the commission to clarify part of its May ruling on domestic roaming services.
In that ruling, the CRTC did not make it mandatory for wireless carriers to sell access to their networks to companies that do not build their own wireless infrastructure, which are referred to as mobile virtual network operators (MVNOs). However, the commission did rule that an MVNO that negotiates access with one carrier can also take advantage of any roaming agreements that carrier has in place with other operators to extend the service it can offer to customers.
"We're trying to innovate and give consumer choice – we're trying to do everything that that policy was set to do," Samer Bishay, president of both Sugar Mobile and Ice Wireless, said in an interview Tuesday. He called the dispute with Rogers an example of "using regulatory or legal manoeuvring to really just block competition."
If Rogers cuts off its roaming service, he said Sugar Mobile could still operate because Ice Wireless has roaming agreements with other carriers, although he would not specifically name those carriers. However, he added, "it would set a precedent. Then we would have uncertainty and we wouldn't know who could potentially do the same thing."
Rogers spokesman Aaron Lazarus says the company "welcomes all fair competition," but that Rogers does not have a roaming agreement with Sugar Mobile. "We value our relationship with Ice Wireless and hope these violations of our agreement will be resolved."
He added that Rogers has plans in place to make sure its own customers travelling in northern Canada do not lose access to mobile coverage as a result of the dispute.
Sugar Mobile has requested an interim order to prevent Rogers from cutting off service. In a procedural letter Tuesday, the CRTC said it will expedite the process to consider interim relief and has asked Rogers to maintain its roaming agreement with Ice Wireless until the commission rules on that point.
Sugar Mobile says its subscribers are on WiFi for "more than 80 per cent of the time," but "the ability to roam on Rogers' network, even for very brief periods of time, is essential to the service." It says losing roaming access would make it impossible for customers to make emergency calls when not connected to WiFi and it would also "cause irreparable reputational harm and likely prevent many Canadians from being willing to try the service or other innovative mobile wireless services."
Both Ice Wireless and Sugar Mobile are majority-owned by Markham, Ont.-based Iristel Inc., a regulated telecom provider that operates across Canada. Iristel provides voice over Internet protocol (VoIP) telephone calling and short messaging service (SMS) and also licences phone numbers from the CRTC. That's how Sugar Mobile is able to offer customers local phone numbers as well as voice calling and texting services when connected to WiFi.
The CRTC is also expected to rule this week on a separate challenge to its May decision on wireless roaming services. The Canadian Network Operators Consortium (CNOC), which represents independent Internet service providers, asked the commission to "review and vary" its decision not to make it mandatory for the large carriers to offer network access to MVNO players.
In an application filed in August, CNOC argued that the CRTC failed to make a clear distinction between simply marketing and reselling service under a separate brand versus "full" MVNOs, which do not own licences for airwaves (spectrum) but do build and operate their own backbone networks and make interconnection and transport arrangements to manage voice and data traffic. CNOC argued that the commission should have supported mandatory spectrum access for such players.