Shaw’s McAleese says no ‘use case’ for MVNOs in Canada

TORONTO — Paul McAleese, president of wireless at Shaw Communications Inc. said at an industry conference he doesn’t see MVNOs being successful in Canada — a somewhat different message than what the company recently told the CRTC. “I’m not convinced there’s a use case in the Canadian market for MVNO to work. I can see isolated pockets,” he said at the Canadian Telecom Summit Tuesday. “They’re difficult and they typically require scale and they typically require significant investments that people may or may not be required to make.” He said Freedom has been around in the Canadian market for 10 years and still only has a less than 10 per cent market share. “I don’t see a role for a fifth carrier in Canada,” he said. “Without the pricing power to distinguish itself from one of its competitors, I just don’t see the validity of the business case.” In comparison, the company told the CRTC in its mobile wireless review -- which is considering whether to mandate MVNOs in Canada -- time and encouraging network investment are needed for the CRTC to see an organic wholesale market for MVNOs to emerge. Both Shaw and the bigger carriers have argued against mandating access by MVNOs to carriers’ networks. Freedom told the CRTC a wholesale market where MVNOs can get into agreements with facilities-based competitors will emerge on its own when there’s an alternative network that is comparable to BCE Inc., Rogers Communications Inc., and Telus Corp. McAleese said in a follow-up statement that the two messages aren’t contradictory, because his argument is that mandated MVNOs won’t work “because MVNOs lack the pricing power that Freedom Mobile and other facilities-based providers have by virtue of the investments they’ve made in their network and infrastructure.” He said that’s consistent “with the points outlined in our submission, namely that MVNOs only stand a chance of success in markets where strong facilities-based competition is established, and that the reason they haven’t emerged yet in Canada is a clear sign that said environment doesn’t yet exist in this market. Once the regional providers fully develop their networks and operations, we expect that the conditions will become more favourable for MVNOs.” During his morning appearance at the conference, McAleese also said Freedom Mobile’s moves to offer plans like its 10 GB for $60 in 2017 have driven down prices in the market. He predicted Tuesday that data overages will disappear from the Canadian market like they have from other countries. “Data overages are toxic revenue and they will go away,” he said at the Canadian Telecom Summit in Toronto. “You have these incredible distortions in the market relative to the U.S.,” he said, noting that across the border, there are plans offering four unlimited lines for $100 or $120 US. “Then you have this remarkable construct where the big three charge up to $100 a GB… in overage. I can’t think of another product category where something costs 10 times more in Niagara Falls, Ont. than in Niagara Falls, New York.” McAleese also repeated his overture to Rogers Communications Inc. to pitch Freedom as a potential network-sharing partner, but acknowledged his interest isn’t yet being returned. “The moment that the Rogers leadership can look in the mirror and say, ‘these guys are here to stay, there’s no point building on top of each other’,” he said. “I think there’s great logic to it, but you can lead a horse to water. So far that’s not been a conversation that’s been productive.” But, McAleese argued, network sharing is a separate beast from mobile virtual network operators. That’s because MVNO’s wouldn’t have enough to bring to a partnership, he said. Any customers MVNOs could bring to a partnership a carrier could bring in themselves, he said. — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Michael Lee-Murphy at mleemurphy@thewirereport.ca

Shaw’s McAleese says no ‘use case’ for MVNOs in Canada

News | June 4, 2019

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Shaw’s McAleese says no ‘use case’ for MVNOs in Canada

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