Liberals to be ‘less aggressive’ on 4th-player policy: analyst

Canaccord Genuity analysts Aravinda Galappatthige and Sanford Lee said Tuesday that they expect a Liberal majority government, as elected Monday, to take a “softer pro-wireless new entrant stance.” They said in a research note that the previous Conservative government had “consistently pursued the idea of a fourth national wireless player” through policies such as spectrum caps and set-asides in spectrum auctions, expecting that more competition would lower prices for consumers. The Liberals could shift that tactic to “support and nourish strong four-player markets rather than taking a more broad-based approach,” the note said, while the less-aggressive policy they expect the Liberals to take could benefit Rogers Communications Inc., Telus Corp. and BCE Inc. Scotiabank analyst Jeff Fan said in a note released Friday before Monday's election that he expected a Liberal government would benefit Canada's large telecom-service providers. Galappatthige and Lee said Tuesday that a Liberal government might be more favourable to a potential sale of Manitoba Telecom Services Inc.’s MTS division, including the possibility that Rogers, Bell or Telus buy assets that include its wireless division. However, they cautioned that “speculation of an MTS division take-out is pre-mature at this stage, as it would first be dependent on the sale of Manitoba Telecom’s Allstream division and such a transaction would face strong regulatory scrutiny due to wireless concentration issues in Manitoba.” The analysts also said they don’t expect the government to “to prioritize further changes to Canadian foreign ownership rules over the near to medium-term,” following changes implemented by the Conservatives in 2012, which removed foreign ownership restrictions on small telecommunications providers with less than 10 per cent of the national market share. The note said there is a “fairly low” probability of the Liberals contemplating a tax on streaming services such as those provided by Netflix Inc. and Google Inc.'s YouTube, and likely no immediate change to the direction that has already been set regarding TV services. “On the distribution side, we do not expect meaningful changes from the CRTC until the impact of the a-la-carte regime can be fully digested,” they said, noting that won’t be until 2018. “While we suspect the Liberals would want to mitigate the negative impact of these regulations on smaller networks, we expect little change to the regulations until the impact of the new system is clearer.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Liberals to be ‘less aggressive’ on 4th-player policy: analyst

News | October 20, 2015

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Liberals to be ‘less aggressive’ on 4th-player policy: analyst

News | October 20, 2015

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Bell Canada to offer service in eastern Ontario ILEC’s footprint

CRTC tells Iristel to pay overdue fees to Bell, Northwestel or risk losing service

Bell files for injunction over Rogers, Warner Bros. deal

Indigenous communities to buy Northwestel for up to $1B

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us