Rogers, Bell, Telus, you’ve got competition, and soon!

For the past few months something has been happening in Canada’s telecoms sector; an auction for wireless spectrum licences. The auction is now over and the outcome was more positive than most analysts expected. The Canadian goverment pulled in tripple what they expected, a whopping 4.2 billion. The verdict? This should be good for Canadian consumers and it’s about time. Federal Industry Minister Jim Prentice said,

The industry now has an unprecedented opportunity — thanks to the government’s Advanced Wireless Services policy and auction — to develop products and services that offer choice to Canadian consumers and businesses. We think consumers will be the big winners in this auction.

The big winner of the action is a company called Globalive. They will most likely be a national carrier with the possibility of one other national carrier. We will also have a few regional carriers too. The CEO of Globalive told CBC News,

Our current customers are enjoying simple offerings that have no surprise fees. We’re going to continue that track record in the wireless world, Canadians are unhappy about the costs, the complexity of the billing. I can speak for myself as a consumer. I’m confused by my bill.

It’s time for change

The big three have welded monopolistic control of the Canadian wireless market for far too long. Our prices are not competitive with the rest of the world and the services we get compared to other countries are also deemed to be of poor quality by many. This may be the kick that the big three need. Wake up and give Canadians what they want. The great news is that some of the new providers may be up and running as soon as the first quarter of next year. They are also expected to offer GSM technology.

Rogers, Telus and Bell also did a lot of bidding with Rogers being the biggest bidder at almost one billion. I didn’t quite understand why they were able to bid if the point was to make a more competitive landscape. The new players are also going to have to negotiate for rights to transmission towers which are usually owned by the big three. This is also being regulated by the government, so lets hope in the end it will be fair and we see some competitive pricing, otherwise this will all be for nothing.

Competition drives innovation

In other industries especially electronics competition drives not only lower prices, but quality and innovation. You have companies that will compete by offering cheaper prices and other companies that will compete by offering higher quality or new and innovative technology. With the Canadian wireless sector none of this holds true. The big three do not engage in price wars, the only thing they offer up are confusing pricing schemes, convoluted websites with horrible usability and a lack of a coherent product offering. We are also usually years behind other countries. Look at the hugely popular iPhone which is a high demand product and only appeared officially in Canada a few weeks ago and only from one company with hefty prices. This is after being on the market for over a year in other parts of the world.

Actions speak louder than words

Now is the time for everyone to sit back and take a mental note of just how much these big three have used confusion to over charge us. It may be time to jump ship and punish past bad deeds with your wallet. Things may not change and that will be very disappointing, but the action went better than anyone planned and their are more players than expected. This leads me to hope that competition will be a factor in the future of Canadian wireless offerings. I know that if one of the new players does offer good prices, even if Rogers, Telus or Bell offer copy cat pricing at the last minute, I will still sign up with a new carrier out of principal.

More on the spectrum auction:

• CBC News: Cellphone market poised for shakeup as spectrum auction ends
• Globe & Mail: Telco newcomers poised to storm market