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Large barriers remain to bring Ryan Reynolds' Mint Mobile to Canada, despite CRTC decision

FILE - In this Tuesday, Dec. 10, 2019 file photo, Ryan Reynolds attends the premiere of Netflix's
Ryan Reynolds could still bring Mint Mobile into Canada but he's going to have a lot of challenges with the new CRTC rules in place. Image credit: Associated Press (Charles Sykes/Invision/AP)

Ryan Reynolds' MVNO Mint Mobile will still face large barriers if it tried to operate in Canada, despite the CRTC's new ruling on granting regional carriers access to the wireless networks of Canada's dominant players.

The Canadian Radio-television and Telecommunications Commission (CRTC) said last week that only regional carriers which have invested in network infrastructure and spectrum will be granted access. These players include Eastlink, Videotron, Xplornet, Ice Wireless, SSI Micro and TBayTel.

MVNOs, or mobile virtual network operators, are providers that do not have an established network to provide services, and instead rent access to networks provided by larger incumbent players.

Shortly after the announcement, Reynolds tweeted he is happy his company might soon "serve Canadians, who've been paying some of the highest phone bills on the planet."

Yahoo Finance Canada reached out to Mint Mobile for comment but did not get a reply in time for publication.

Reynolds launched the company on Sept. 9, offering customers in the U.S. a pre-paid service that starts at US$15 per month, as well as an unlimited plan priced at US$30.

Mint Mobile offers cellphone plans to customers in the U.S. The MVNO does not own any network infrastructure and has a licensing partnership with T-Mobile's coverage for its service.

Samer Bishay, president and chief executive officer of Iristel and Ice Wireless says, on first impression the new rules may look great, but they aren't very supportive of true MVNOs like Mint Mobile.

"You quickly realize that this is not an enviable decision by any means," he said in an interview. "There's nothing MVNO about it whatsoever. This is literally an MNO, allowing you to permanently roam. From an MVNO perspective, calling it an MVNO decision has nothing to do with that, because if you don't own any spectrum, you don't operate."

Bishay says even if Reynolds wants to bring Mint Mobile into the country, a decision to let him operate (if he were to take the mandated approach) would still depend on the discretion of the mobile operators and incumbents, based on commercial considerations.

He adds that theoretically, Reynolds could partner with any of the regional carriers, but would have access only to the spectrum for zones where those carriers operate. He also says the regional carrier would still have to strike a deal with the incumbents, which he cautions will not be an easy ride.

"Ryan Reynolds is welcome to come and sign a deal with us," Bishay said. "We would be able to, from day one, offer [Mint Mobile] access in our spectrum holding areas, which is about a million and a half Canadians. But let's say he wanted to go to Toronto or Montreal and start selling there, then he can either do a deal directly with [the incumbents], and we know how that ends up."

Michael Geist, a law professor at the University of Ottawa, said in an email that the new CRTC deal does not really help Mint Mobile to come to Canada.

"It could try to negotiate with the [incumbents] for MVNO access, but that approach has rarely worked for others," he said. "By limiting the availability of mandated MVNOs, the CRTC has effectively blocked the entry for these new competitors."

Geist says that players like Mint Mobile and other MVNOs could be successful in the Canadian market but the CRTC has not allowed this type of mandated access.

According to the new rules, rates have not been set and will be negotiated between providers. CRTC chairperson Ian Scott says if parties aren't able to come to a decision on rates during negotiations, the commission will step in as arbitrator. In an interview, he said that for any company to operate with these new rules, it would have to have a mobile wireless spectrum.

"They just can't offer a service without it, and it's got to be tier four or greater, if you don't have that you don't qualify," Scott said. In Canada, spectrum licence tiers determine the level and breadth of coverage, from a national licence to one of 172 localized service areas.

Bishay says he is also concerned that this announcement came after Innovation, Science, and Economic Development closed applications for the upcoming spectrum auction, which blocks new entrants from taking advantage of the new rules.

"The [upcoming] auction was already closed, so whoever put their bids, put their bids. When is the next spectrum auction? Who knows," he said. "The only way for him to expand further is to wait for the next spectrum auction, or Bell, Telus, Rogers came in and say 'hey we want to be a part of this, we will give you a commercial agreement.'"