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Get it Wholesale!

Reflections on the CRTC Review of Wireless Roaming Pricing

 
   

June 2014 - IGB Grant +1 514 849 3508 and Lindsay Shaddy

   
    OVERVIEW  
 

 

 

Get It Wholesale! Our focus this issue is the question of Wholesale Domestic Wireless Roaming.

"Wireless roaming" — the very words sound expensive. When wireless users see the phrase on their mobile invoice, they know that it is time to start worrying: This bill is going to hurt. Industry Canada Minster James Moore felt the pain of Canadians and expressed the frustrations of both voters and the smaller wireless providers when, in December 2013, he announced that legislative measures would be introduced to change the way the large incumbents establish roaming rates for access to their national networks. Contemporaneously, J-P Blais, Chairman of the CRTC, also announced in December that the CRTC, the telecommunications regulator, would also review the process and pricing of roaming agreements. Minister Moore said that Ottawa would prevent the big wireless providers from charging small wireless providers more than they charge their own customers for domestic roaming. How much extra do the incumbents charge the new entrants and their customers? The rates can be "more than ten times what they charge their own customers," Minister Moore said.

This paper explores what a wholesale rate might be. It will look at typical retail rates paid by Canadians for airtime minutes, for data, and for messaging, and it will deduct elements of the carrier's costs for "retail" service functions to develop an approach to derive a suggested wholesale price for inter-carrier roaming. Our conclusions? We believe that the ideal inter-carrier roaming rate would be significantly less than the interim rates established by Industry Canada in the Budget Implementation bill, and that the new wholesale rate structure will be welcomed by smaller Canadian carriers. The new rate structure will provide a major boost to their economic viability and reinvigorate subscriber growth. Furthermore, their customers will join in the rejoicing: finally, they will be able to use their devices outside of their carrier's home networks without the spectre of severe economic penalty hanging over them.

 

 
   


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Tuesday, 23 October 2018

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