TORONTO - Cogeco Cable Inc. (TSX:CCA) says it will urge Ottawa to clear the way for a new type of wireless network that's been used successfully in other countries, but hasn't been available in Canada.
Louis Audet, Cogeco's chief executive, said he will press his case for Mobile Virtual Network Operators or MVNOs - in which large network owners are forced to sell airtime to smaller carriers at regulated prices - at Canadian Radio-television and Telecommunications Commission hearings next week.
Audet told reporters and analysts Thursday in a conference call from Montreal that this type of network reselling is common in other countries, like the U.S. and Europe, but the idea it has not taken hold in Canada.
"The proposal we are making calls for a regulated access to the radio access network of the established carrier," Audet said. "Because we believe that anything short of regulated access will not lead to the successful implementation of MVNO in the country."
Audet, who heads a telecom and media business that operates in Quebec and Ontario said it's unlikely a fourth national carrier will emerge to challenge the three big incumbents — Rogers (RCI.B), Telus (TSX:T) and BCE's Bell (TSX:BCE - as the federal government has proposed, to bring down prices and stimulate innovation.
He said that "virtually all" of the new companies that emerged to build wireless networks after the 2008 spectrum auction "were strangled" before they could develop.
Two of the new carriers — Public Mobile and Mobilicity — entered court-protection last year because of their financial struggles, although privately owned Wind Mobile is growing its subscriber base.
In addition, two existing cable companies — EastLink Communications and the Videotron arm of Quebecor (TSX:QBR) are expanding new wireless businesses in their regions. Manitoba Telecom (TSX:MBT) and Sasktel also have strong established wireless bases in their respective provinces.
However, the Big Three continue to collectively represent 90 per cent of Canada's wireless customer base and that their smaller rivals have found it difficult to compete against the national carriers.
Audet said that MVNOs are an good alternative for Canada — provided that the CRTC uses its power as a regulator to compel the Big Three to provide access to their networks at a reasonable, regulated price.
Audet said there are more than 800 MVNOs around the world. One of the largest is Virgin Mobile, which operates in 10 countries.
He said that there a similar approach has worked in Canada on the wireline front, where various companies can buy network access on a wholesale basis from a major carrier and then resell it on a retail basis.
"That is occurring on a daily basis. And that has helped invigorate the competitiveness of the marketplace. So we see no reason why this could not occur in wireless as well," Audet said.
The federal regulator will hold hearings next week to consider changes to the wireless industry.
