Canada telcos to push back against government bid to cut wireless bills

OTTAWA (Reuters) - Canada’s major telecom companies are planning to intensify lobbying against the new minority Liberal government as it moves to fulfill election pledges to cut cellphone costs by 25% with some executives warning government action could hamper expensive network rollouts.

FILE PHOTO: A woman uses a mobile device while walking past a Bell payphone in Ottawa February 19, 2014. REUTERS/Chris Wattie/File Photo

Canada’s three telecommunications providers, BCE Inc’s Bell unit, Rogers Communications Inc and Telus Corp, control around 90% of the market and Prime Minister Justin Trudeau said during the campaign he could force providers to take action.

The industry is particularly unhappy about the Liberals’ pledge to allow more access for Mobile Virtual Network Operators (MVNO) - which lease wireless capacity at wholesale prices and resell it at reduced retail prices - saying they do not help build the expensive infrastructure needed to ensure service.

“We’re fighting a five-front battle here and we will use whatever tools are at our disposal to convince the powers that be ... that this is wrong-headed,” an executive at one of the major firms, said, adding the prospect of MVNOs was a greater existential threat than price cuts.

The executive requested anonymity given the sensitivity of the situation.

The Canadian Radio-television and Telecommunications Commission (CRTC), which regulates the industry, is probing whether it should order the major players to offer more access to MNVOs, which complain they are effectively being shut out.

On Wednesday, Bell asked the government to overturn an August CRTC order to cut the rates that third-party internet resellers pay the major firms for access.

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Robert Ghiz, President and Chief Executive of the Canadian Wireless Telecommunications Association, said MVNOs were short-sighted and a bad idea.

Trudeau lost his majority in the October election and will most likely govern with the aid of the left-leaning New Democrats, who also want a crackdown on bills.

Jon Dignan, a spokesman for Innovation Minister Navdeep Bains - who has overall responsibility for the wireless file - said the government was serious about cutting wireless bills.

But he sidestepped questions about what exactly Ottawa would do, saying that depended on what instructions Trudeau gave to whoever was Innovation Minister after Nov 20.

The Liberals said they will initially work with the firms to ensure they offered plans comparable with global prices.

While Canadian monthly plans have been gradually falling, they still cost more than in the United States or Australia, which like Canada is a vast underpopulated country.

Industry players complain the Liberals are using old data and note the CRTC says between 2016 and 2018 prices fell by as much as 35%. Major firms this year introduced new unlimited monthly plans that sell for between C$50 and C$70.

“They could probably achieve that goal (the 25% cut) by just continuing to encourage facilities-based competition in our country,” said Ghiz.

Telus spokesman Richard Gilhooley said the firm looked forward “to working with all parties to achieve our common objectives”. Rogers said that over the past five years, the cost of data across its brands had decreased by 50%.

Bell referred a request for comment to the CWTA.

Reporting by David Ljunggren; Editing by Marguerita Choy