Ottawa opens door for new cellphone competitors

[urban.one]

EXCERPT FROM ARTICLE

STEVEN CHASE AND CATHERINE MCLEAN

Globe and Mail Update

November 28, 2007 at 4:20 PM EST

OTTAWA, TORONTO — — Big changes are ahead for the wireless industry after Ottawa decided to intervene and help new cellphone entrants break into the market.

In next year's auction of new spectrum for wireless services, Industry Canada said it will reserve 40 megahertz of spectrum for new entrants to buy. That means they won't have to bid against the ruling cellphone carriers, Bell Canada [BCE-T], Rogers Wireless [RCI.B-T], and Telus Corp. [T-T]for wireless spectrum.

The remaining 65 MHz of spectrum is open to all companies.

The government is also forcing existing carriers to open up their networks for roaming, including to the customers of the new entrants at commercial rates. Moreover, all will also have to share their cellphone towers and sites.

The auction rules, released on Wednesday, are good news for communications companies such as Quebecor Inc. [QBR.A-T] division Vidéotron Ltée and Manitoba Telecom Services Inc., [MBT-T]which had pushed for government help to allow them to move into the wireless market. They had argued that their entry would pave the way for greater competition in Canada's cellphone industry, which has been criticized by some as being too cozy.

[Crymson]

WOOT!

[A790]

Maybe we'll see some realistic data plans!

[Xtrema]

Pointless. All those frequency are out of Quad Band or 3G range. Phones will be few and expensive.

[TomcoPDR]

no more $300 - $500/month phone bills working on the road

[Mibz]

Originally posted by A790
Maybe we'll see some realistic data plans!

Pffft, they'll just end up merging into one big telecom company and increase rates. Quebecor Inc will feel they're not getting a big enough cut and threaten to separate.

[toyboy88]

All I want is data like the US............

[SilverRex]

we may see better and newer phones finally

[spikerS]

people seem to think that more people in the market will create more competition. Not really. In every market from cell phones to houses to cars to computer parts, there is collusion between the companies. All the companies know it, if you want the service, you are going to have to pick one of them, and as long as 30-40% of the people are willing to pay the price for a service, they will keep charging high prices.

you all want to see data prices fall? pack up your PDA / Crackberry. "but i need it for work/looking at porn" you say? you are the reason the price is so high.

and are we going to see data prices like the states? nope. biggest reason?

USA: 31 people per km²

canada: 3.2people per km²

with more people in an area, it makes it more financially feasable to have more coverage, and with more population density, the cost of the infrastructure can be spread over more people. with the average cost of a tower being in the neighbourhood of $1.5 million, you do the math.

[davidI]

Originally posted by spikers
people seem to think that more people in the market will create more competition. Not really. In every market from cell phones to houses to cars to computer parts, there is collusion between the companies. All the companies know it, if you want the service, you are going to have to pick one of them, and as long as 30-40% of the people are willing to pay the price for a service, they will keep charging high prices.

you all want to see data prices fall? pack up your PDA / Crackberry. "but i need it for work/looking at porn" you say? you are the reason the price is so high.

and are we going to see data prices like the states? nope. biggest reason?

USA: 31 people per km²

canada: 3.2people per km²

with more people in an area, it makes it more financially feasable to have more coverage, and with more population density, the cost of the infrastructure can be spread over more people. with the average cost of a tower being in the neighbourhood of $1.5 million, you do the math.

The difference with cellphones is that the CRTC is the one aiding in their collusion. If I thought computers were outrageously priced, I could do a start-up company and start selling reasonably priced systems in the market without being restricted by the gov't. The CRTC effectively made it impossible for new entrants to enter the market....so this is a good step. Unfortunately, I don't think it will change much.

Also, in regards to your density argument, I don't buy it. Places I've visited in Australia, the Middle East and Africa have lower population densities than the U.S., and ridiculously cheap cell phone plans...do you really care if someone on Baffin Island has a phone?? Why not just build towers along the trans-canada highway and in those cities / towns that have enough population to make it cost effective?

[spikerS]

Originally posted by davidI


Also, in regards to your density argument, I don't buy it. Places I've visited in Australia, the Middle East and Africa have lower population densities than the U.S., and ridiculously cheap cell phone plans...do you really care if someone on Baffin Island has a phone?? Why not just build towers along the trans-canada highway and in those cities / towns that have enough population to make it cost effective?

While you were right with the CRTC in the past, they have bowed out of much of it now, hence the auctioning of new bandwidth.

as for the coverage footprint, all the major corridors and population centers are covered, but nowhere to the extent that the USA is covered.

As for the price of data plans, how much do you think the average somalian or or african has for disposable income? And how much does the average american or canadian? These companies will charge whatever they feel that someone is willing to pay. If you knew your car was worth $17,500 and someone came up to you and said i will buy it for $22,000 and if you can get it, 40 more just like it, you really gonna sell it to the snot nosed kid offering $16,000? As long as the oil companies and larger corporations continue to pay these fees, don't expect any breaks.

also, these othe countries are quite smaller than the USA or canada, hence the need for less infrastructure, hence less cost.