Bell and Rogers execs say change to MVNO rules unlikely

Whatever the outcome of next month’s federal election, there will be no mandated access by mobile virtual network operators (MVNOs) to incumbent wireless networks, BCE Inc.’s outgoing CEO George Cope predicted while speaking to investors Tuesday at the BMO Media and Telecom Conference in Toronto. Responding to a question about the election campaign -- which officially began Wednesday and is likely to include debate on telecom affordability -- and what impacts election rhetoric may have on the CRTC’s upcoming wireless review in January, Cope told investors that whichever party is elected, he doesn’t foresee mandated MVNO access coming anytime soon. “We may have gone a little too far on some of the pricing recently, but I am completely optimistic that this country and both governments that have been in office understand the importance of facilities-based competition,” Cope said Tuesday. While the CRTC functions at arms' length from government, federal cabinet does have the power to send back specific decisions. He also joked that even if the telecom companies are targeted in some election campaigning, the company does well with elections. “I’d say to investors that we own Bell Media and we love elections, cause it’s a lot of advertising revenue … We’re hedged on all these products,” he said. Responding to a question about MVNOs, Cope echoed what telecom companies have been saying all summer: “The market’s been as competitive as it’s ever been, the infrastructure builds required are the largest we’ve seen in years.” In recent months, the country’s largest telecom providers have raced to out-do one another with a combination of low-cost, big data plans. Both the Liberal government and the CRTC have teased the possibility of giving MVNOs -- essentially resellers -- mandated access to the infrastructure belonging to the incumbent telecom companies, a notion which has been consistently opposed by the telecom companies, including new entrant Shaw Communications Inc. The Liberals are considering including mandated MVNO access in their election platform, according to media reports. The NDP has gone a step further in their election messaging, and has actually promised a price cap. Cope was also asked about the presence of Huawei Technologies Co. Ltd. equipment in Bell’s 5G roll out. “We would like to see the ability to be able to use that technology at the radio access layer,” Cope said, while also saying that the company would not fight against any potential ban of the company in the core of any future 5G network. There is already currently an effective ban on Huawei equipment in network cores. Should a future government decided to issue a complete ban on Huawei gear on any part of the Canadian 5G network infrastructure, both Bell and Telus Corp. would have to spend potentially significant amounts of money removing and replacing the gear from the radio portion of their 4G network. Cope also reassured investors that he thought the move toward three-year financing plans -- introduced by Telus Corp., followed by Rogers Communications Inc., promised by Bell, and ultimately frozen by the CRTC -- would survive the current review underway at the CRTC. “I think there is a fairly strong commercial rationale on the hardware program where the idea of us using our balance sheets to finance the hardware. If we’re successful in getting from two to three years on the actual pricing for the consumer after the election -- I think we should be successful, it’s only logical that Canadians would pay less for the amortization,” Cope said. Rogers CFO Tony Staffieri questioned the wisdom of the CRTC’s recent decision on wholesale internet rates, calling it “disappointing.” The CRTC announced a new rate regime for the selling of wholesale internet in August, at significantly lower levels than the interim rates the companies had been charging since 2016, along with required retroactive payments toward resellers. Several companies subsequently announced that they would be trimming back investments. Analysts have said that a court challenge and an appeal to the CRTC or to the government is likely. While admitting it would cost the company some $140 million in retroactive payments, Staffieri said the new wholesale rates were “not significant on a go-forward basis.” Staffieri did say that there may be some impacts in terms of spending going forward, however. “There are appeal provisions that we’ll work through, and of course depending on where it ends up, we’ll look to our capital allocation model accordingly,” Staffieri told investors. Likewise with the possibility of MVNOs, Staffieri reprised Bell’s Cope, pointing to the increased competition. Referencing the 120,000 people he said are employed in telecoms across the country, as well as the investments made in infrastructure, Staffieri said that the company is “optimistic that that all gets factored in” when the wireless review process assesses mandated MVNO access. “We still sorta scratch our heads as to the problem it would solve. We think we have some very healthy competition. We have four well capitalized players in each of the markets,” Staffieri said. — With reporting by Michael Lee-Murphy at mleemurphy@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Bell and Rogers execs say change to MVNO rules unlikely

News | September 11, 2019

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

Bell and Rogers execs say change to MVNO rules unlikely

News | September 11, 2019

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