Canadian regulator starts hearings on boosting cellphone competition

By Moira Warburton

TORONTO (Reuters) - Canada's telecommunications regulator began hearings on Tuesday on increasing competition and lowering the cost of cellphone plans, possibly by requiring the country's top three wireless providers grant access to their networks to other companies.

The hearings, held by the Canadian Radio-television and Telecommunications Commission (CRTC) over nine days in Gatineau, Quebec, aim to also examine whether the market is ready for 5G and if it adequately serves Canadians.

The CRTC said it heard from 28,000 Canadians and surveyed over 1,200 directly, the "vast majority" of whom felt Canadian cellphone prices were not as competitive as in other countries, CRTC Chairman and CEO Ian Scott said in opening remarks.

Three companies dominate Canada's telecoms industry. BCE Inc's <BCE.TO> Bell unit, Telus Corp <T.TO> and Rogers Communications <RCIb.TO> together control 89.2% of the mobile subscriber market, according to the most recent government data from 2018.

Bell, Rogers and Telus were required to provide wholesale roaming services to competitors at rates set by the CRTC for a minimum of five years starting in 2015.

Scott said the commission's preliminary position was that this regime should remain in place, subject to certain constraints.

The CRTC will also consider whether to create a Mobile Virtual Network Operators arrangement, or MVNO, mandating that companies lacking their own infrastructure receive access to the networks built by Bell, Telus and Rogers. This would allow MVNOs to provide phone plans at lower rates.

"Our goal is to ensure that Canadians have access to a world-class communications system," Scott said.

Industry groups have opposed MVNOs, arguing prices have already dropped and saying that allowing wider access would remove incentives to invest in network infrastructure.

Ceasing to encourage facilities-based competition "would really slow Canada down in terms of our build-outs and in terms of us getting ready for 5G by improving our networks," Robert Ghiz, president and CEO of the Canadian Wireless Telecommunications Association, said in a phone interview.

Eros Spadotto, an executive vice-president at Telus, said mandated MVNOs were not a "silver bullet" to the problems of affordability and competition.

"As we enter a world of 5G, it is critical that we encourage investment in network technology, the backbone of the Canadian economy," a Rogers spokeswoman said in an emailed statement. "We need to balance driving affordability with investing long-term."

Prime Minister Justin Trudeau's Liberal party campaigned in the 2019 federal election on a pledge to lower phone plan costs by 25%. [nL2N27S14G]

(Reporting by Moira Warburton; Editing by Dan Grebler and David Gregorio)