Canada said to be falling behind in wireless innovation

Canada is being left behind in innovation in the wireless sector because lack of wholesale access to broadband networks, says the owner of a U.S. system that charges its customers an average of $21 US a month.

Toronto-based Tucows owns Ting, a U.S. wireless service provider that has no contracts and charges users only for what they use. It is a reseller that gets its service at wholesale prices from the Sprint Network.

But under current rules, there could never be a service like Ting in Canada, says Tucows CEO Elliot Noss.

Tucows operated an independent dial-up ISP, before transitioning into domain registration and file hosting in Canada and it has operated wireless reseller Ting in the U.S. for two years.

“Our pricing is dramatically lower, but it’s as a much higher level of customer service and a much better customer experience in billing, etc. For Sprint, because we’re so efficient at customer service, they actually make more from a wholesale customer that we bring in than from their own customers,” Noss said in an interview with CBC’s Lang & O’Leary Exchange.

There is a lack of openness in the Canadian system in part because of the dominance of the big three telecom companies – Bell, Telus and Rogers, he said.

The big three have developed technologically advanced networks, but they are unwilling to resell their services wholesale to small operators to create an opening for a service like Ting, he said.

“The real bad news we have the most expensive mobile phones in the world, worst in the world.” Noss said. “Second, there are a number of pieces to these businesses – there’s the network, customer acquisition, customer service and the customer experience. The incumbents are pretty good at running a network. They’re really lousy at all the rest. “

The U.S. has a different competitive framework, Noss said, in which Sprint is hungry for business and willing to sell its broadband access wholesale, clearing the way for Ting.

A lack of access to unlimited high-speed broadband at a reasonable cost is hurting innovation, and will leave Canada at a competitive disadvantage, Noss said. He points to the slow adoption of gigabit internet access in Canada, an option that allows ultra-fast service.

Technology is moving so quickly that broadband has moved from being “nice to have” to become critical infrastructure, he said.

“That change has happened so quickly that on a pubic policy level, it hasn’t kept up,” he said.

Noss said one option from the federal government would be a mandated wholesale regime, complete with mandatory pricing, to help open the market.

Noss said his preference would be for the competitive dynamic in Canada to shift, to make it possible for Ting to operate and for small players such as Wind to be viable.

“It would be a change of heart [from the big three]. At a network policy level... around the world if we’re talking about fixed or mobile access, structural separation is usually the most successful means of policy,” he said.