Vidéotron CEO Manon Brouillette said it would be ‘very difficult’ for her company to expand its wireless business across Canada without lowering domestic roaming rates.Christinne Muschi/The Globe and Mail
Quebecor Inc. says it needs the assurance of lower domestic roaming rates before it can commit to expanding its wireless business nationally.
The company asked the Canadian Radio-television and Telecommunications Commission on Friday to set lower mandated rates for what it pays competitors when its customers roam on their networks.
Manon Brouillette, chief executive officer of the company's Vidéotron Ltée division, said Friday that the company has invested $1.8-billion in its four-year-old mobile business and now covers 90 per cent of Quebec. She admitted it has made progress in that market but said it still needs regulatory help there, too.
"But the issue for us today is … what do we do with the spectrum we already purchased outside of Quebec?" she told reporters. "We need to leverage that and to do so … [we need] help in terms of roaming rates and access to tower sharing as well."
Quebecor spent $233-million on licences for spectrum – the radio waves used to deliver cellular services – in this year's public auction. While it won airwaves in Quebec, it also purchased licences in Ontario, British Columbia and Alberta and has said it would consider expanding under the right conditions, one of which is "fair" wholesale roaming rates.
Ms. Brouillette added: "It would be very difficult" for the company to expand outside Quebec if the CRTC left rates at the current levels, which the government capped earlier this year, or adjusted them only minimally.
The company already had a cable-television business in Quebec, which helped when building its wireless network. It would not have the advantage of that existing cable infrastructure outside the province, nor would it be able to entice customers with a "bundled" offering combining mobile with television and Internet service.
"In the rest of Canada, it's a totally different ball game. We would be a pure-play [wireless carrier]," Ms. Brouillette acknowledged. "But we feel there is a place for us. But we need the appropriate conditions."
She declined to comment on the status of any negotiations with new entrants such as Mobilicity or Wind Mobile, which the company said in the past it could look at merging or partnering with. But she said roaming fees, rules for impending spectrum auctions and whether Vidéotron could partner with another player will all factor into its ultimate decision on expansion.
Ms. Brouillette also called proposals that the commission mandate access to carriers' spectrum and towers by companies without their own networks – known as mobile virtual network operators (MVNOs) – "dangerous." She said the government has encouraged the industry to invest in their own infrastructure and changing direction now would undermine the investment Vidéotron has already made.
The CRTC also heard from industry groups and companies such as Cogeco Cable Inc. that support a mandated MVNO model.
The CRTC wrapped up a week-long hearing Friday on the competitive state of the market for wholesale wireless services, an issue it has been examining for more than a year. In June, the federal government introduced caps on what companies can charge each other, limiting rates at no more than what they charge their customers at the retail level.
The CRTC has refrained from rate-setting in the wireless market since the mid-1990s. It must now decide whether there is a lack of competition for wholesale services that justifies intervention and, if so, whether it will regulate rates and how it will set them.
During the week, it heard from the industry's three dominant players – Rogers Communications Inc., Telus Corp. and BCE Inc. – which urged it not to follow a path of heavy-handed intervention in the $21.2-billion sector.
On the other hand, regional operators and new entrants such as Wind Mobile and Eastlink in the Maritimes said lower mandated roaming rates are necessary for them to be competitive.
Chairman Jean-Pierre Blais noted that the commission has a substantial record to review – with more than 1,500 documents and 14,000 pages – and said it would take the "time required to make an informed decision."
He said it would issue a decision within four months of the close of the record, on Oct. 20. Industry observers noted that the ruling will be critical to companies that are making a decision about whether to participate in two spectrum auctions scheduled for next year.