Canada to cap wholesale wireless rates charged by big firms

By David Ljunggren

GATINEAU, Quebec (Reuters) - Canada will limit the wholesale wireless rates that major companies charge their rivals as part of a push to boost competition in the telecommunications sector, the country's broadcast regulator said on Tuesday.

The move means the three firms that dominate the market -- Telus Corp, BCE Inc and Rogers Communications Inc -- will have to charge lower rates than at present. This is designed to allow smaller firms to expand.

Boosting telecom competition is a priority for the federal Conservative government, which since 2008 has set aside some of the airwaves the wireless industry relies on for new entrants and regional players, with mixed success.

The broadcast regulator, the Canadian Radio-television and Telecommunications Commission (CRTC), said Bell, Telus and Rogers "can maintain rates and impose conditions that would not prevail in a competitive market".

It added in a statement: "Other Canadian wireless companies need to obtain these services under reasonable rates, terms and conditions."

The ruling should give less powerful rivals such as Wind Mobile and Quebecor Inc's Videotron unit more scope to expand their services to more of the country.

The smaller companies have long complained the big three charge unreasonable rates and are slow to respond to requests for roaming and tower-sharing deals, thereby hindering competition.

The government last year imposed an interim ruling that meant the major firms could charge rivals no more than the wholesale roaming rate offered to their own retail customers.

The CRTC will maintain that cap for six months, when the big three firms must come back with new rates for wholesale wireless roaming and a costing to explain the proposals. The CRTC can reject the rates if it feels they are too high.

CRTC officials made clear the new tariffs would be less than the current capped rates and stressed the big three firms would not be losing money, since they would be allowed to cover their costs and then add a certain percentage.

Rogers, BCE and Telus each have more than 8 million mobile customers out of less than 30 million in total. The companies say they spend billions on network-building and should not be forced to share them at a discount.

The new system, which only covers GSM technology, will be in place for a minimum of five years, starting May 5.

(Reporting by David Ljunggren; Editing by David Gregorio)