The end of Public Mobile and Mobilicity: What happens next

There was nothing weirder than sitting there at the Toronto Board of Trade a few months ago, listening to Bernard Lord talk about Canada’s wireless sector as if everything was fine.

The former premier of New Brunswick, who now leads the Canadian Wireless Telecommunications Association (CWTA), was giving a speech about the pervasive access to 3G networks here, the rise in data consumption among Canadians and, despite what many analysts say, what he described as competitive rates for smartphone services.

“It’s important to realize what we have at home,” he said, presumably referring to dire wireless conditions in other parts of the world. No wonder Public Mobile, Mobilicity and Wind Mobile pulled out of the CWTA this past summer. Yet what we have at home is an inability for new market competitors to survive.

Lord’s stump speech kept coming back to me following the news that the Competition Bureau has cleared the way for Telus to take over Public Mobile. Of the various maneuvers proposed to the government over the past year, this was in some ways the least contentious, because the wireless spectrum Public Mobile owns is not considered as valuable as that owned by Mobilicity or Wind Mobile. Public Mobile also catered to a more down-market crowd of prepaid customers. If Telus is the Hudson’s Bay Co. of Canadian wireless, Public Mobile will now be its Zellers.

I give Commissioner of Competition John Pecman credit for at least sounding like he’s spoiling for a fight in his statement announcing the decision. “As the vast majority of Canadian wireless subscribers are served by three national incumbent providers, the Bureau will continue to closely monitor the evolution of competition in Canada’s wireless telecommunications industry and take action where appropriate,” he said.

And yet, even after the threat of Verizon coming to Canada completely disappeared, supporters of the incumbents like Lord continue to suggest the feds are taking too much action. “We don’t want subsidies but clear market rules,” he said. “The role of government is not to be about incenting outcomes.”

It’s not? When the last wireless spectrum auction was held, there was hope that at long last, Canadians would face greater choice and freedom of who would provide wireless services. Most reports now talk about Telus having “bought” Public Mobile’s customers, rather than its assets, while Mobilicity is preparing to sell itself off in piece parts later this month. This can only be an outcome that Telus, Rogers and Bell would have wanted.

One of the issues the government had to consider in clearing the Public Mobile deal was whether Telus would honour its $19 a month unlimited talk plan until the end of next year. There will be similar questions around the fate of Mobilicity customers, and given that Wind Mobile is the only startup left in the next spectrum auction, the government needs to ensure consumers are protected amid the consolidation that now feels inevitable. With that the hope for alternatives to the incumbents more or less dead, that’s the only outcome that really matters.