2021 will see wireless boost: analyst

The wireless sector will be buoyed in 2021 by the likely end of the competitive skirmishes brought about by the introduction of unlimited data across the industry, according to Canaccord Genuity analyst Aravinda Galappatthige. "We saw the unanimity of the view that wireless promotions had overstepped across all key players, both incumbent and challenger, as a sign that we may have reached an inflection point on this front," Galappatthige wrote in an analyst note published Wednesday. "While one season does not necessarily make a trend, the relatively milder promotional environment over the past two months ... suggests that we may now be past the peak in terms of promotional irrationality." Indeed, Shaw Communications Inc.'s wireless president Paul McAleese said in October that the wireless market should move from being managed like a growth market into a more mature market, in which pricing discipline is more uniform. In his Wednesday note, Galappatthige wrote that while challengers in the wireless market like Shaw and Quebecor Inc.'s Videotron remain in a "strong position, it is clear that their appetite to trade in pricing and profitability for an even bigger share of the net adds load has largely dissipated." Galappatthige also predicted that based on the way things have gone for the implementation of reduced wholesale internet rates on the wireline side, the regulatory atmosphere doesn't look good for proposed wireless regulations like mandated mobile virtual network operator (MVNO) access. Galappatthige pointed to what he called several indications that suggest “headwinds may be easing, paving the way for a potential inflection point in wireless." The wholesale internet rates -- slashed by the CRTC in August 2019 and subsequently fought by incumbent telecom companies on three separate fronts -- are still not in place as the CRTC deliberates on an incumbent review-and-vary application. Galappatthige also wrote that the sector has "heard nearly nothing from the government" on the 25-per-cent mandated reduction in wireless prices which Innovation Minister Navdeep Bains announced a year ago. Innovation, Science and Economic Development Canada has been tracking prices for the wireless plans it’s targeted for the 25-per-cent decrease, though documents obtained by The Wire Report show that the government had been expecting a 25 per cent price decrease to happen organically, without the government needing to take any action. "Factoring in all this, as well as the significance of 5G from a national economic standpoint and the need to encourage investment, we are now coming to the view that regulatory headwinds have largely eased for the sector," Galappatthige wrote.

2021 will see wireless boost: analyst

Brief | January 7, 2021

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2021 will see wireless boost: analyst

Brief | January 7, 2021

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