Quebecor Inc. wants the government to help it gain access to the valuable wireless airwaves it says it needs to keep competing with the country's largest cellphone carriers.
Manon Brouillette, chief executive of the Quebec company's Videotron Ltd. cable and wireless division, made a public plea Wednesday for Ottawa to consider the need to "balance" spectrum resources in favour of new wireless operators.
Addressing a gathering of industry leaders at the Canadian Telecom Summit in Toronto, Ms. Brouillette said the Big Three carriers – Rogers Communications Inc., BCE Inc. and Telus Corp. – have lowered their wireless prices in Quebec since Videotron launched its own network and services in 2010.
"New-entrant competition has had a profound effect on the marketplace. It has forced all players to be creative; to innovate. We now need to nurture and encourage the competitive spark," she said. "We have already tasted the sour fruits of oligopoly," she added, arguing the government should take steps to make sure the benefits of competition – such as increased wireless adoption and more affordable prices – don't disappear.
After acquiring spectrum in Ontario, Alberta and British Columbia in two separate auctions in 2014 and early 2015, Quebecor explored expanding its wireless service outside of the province. But the company announced in September it would not build its own "network from scratch in the rest of Canada" and instead said at the time it would look to sell the airwaves to an incumbent or consider a partnership or some other type of arrangement with Wind.
Ms. Brouillette said the company followed the rules in acquiring those airwaves and planned to expand its wireless business outside of Quebec but ultimately wasn't able to do so. "We bought the spectrum with great intentions of using it. Now the game has changed with Shaw [Communications Inc.] purchasing Wind … at the end of the day we could not purchase Wind," she said.
"So we'll see what we can do with that spectrum in the future."
Ms. Brouillette said Videotron needs more "low-band" spectrum – the airwaves used to send radio signals and build wireless networks – to continue improving its network and keep up with the three incumbents. Airwaves in frequency bands below 1,000 megahertz are valuable because signals travel further and can penetrate buildings with greater ease.
The Big Three own more low-band spectrum than new entrants, such as Videotron and Wind Mobile, in part because the government allocated certain airwaves to Rogers and the incumbent telephone companies in each region in the 1980s and 1990s, when the wireless industry was in its infancy.
The next chance for Canadian carriers to get their hands on such airwaves will be an auction for the 600 MHz band.
Since the process will involve reallocating the signals of certain broadcasters currently using the band, and could have implications for cross-border interference, Canada has agreed to co-ordinate its policy for the auction with the United States, which is currently conducting its own multistep auction.
The Department of Innovation Science and Economic Development has not yet begun its formal consultation on the rules for the Canadian auction, which is not expected to take place until late 2017 or even 2018.
Ms. Brouillette would not outline a specific request for the structure of that auction, but in previous public sales, the government has reserved certain swaths of airwaves for smaller players at reduced prices.
"The government needs to remember that 30 years ago they gave it away. I'm not saying that they have to give it to us today, not at all," she said in an interview after her speech.
"But just make sure that they put in place a framework that will rebalance the spectrum allocation in a forward-looking way, because there's no way we can succeed if we don't have access to that [low-band spectrum] because it's very key and very strategic for us."
In a recent auction for spectrum in the AWS-3 band (a higher-frequency band), critics said spectrum "set aside" for certain small carriers resulted in a subsidy of upwards of $1-billion for companies such as Wind Mobile and Quebecor.
Videotron also owns unused spectrum outside Quebec that it acquired at a discount due to a set-aside auction policy.