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Canada to cap domestic wireless roaming rates

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12/18/2013 | 10:27am EDT
People use mobile devices while waiting to enter the Supreme Court of Canada in Ottawa

TORONTO (Reuters) - Canada will introduce legislation to cap the wholesale roaming rates that big wireless providers charge smaller rivals, the government said on Wednesday, as part of its sputtering drive to foster competition and lower consumer costs.

In announcing the new rules, which will take the form of an amendment to the Telecommunications Act, Industry Minister James Moore said Canada's largest wireless companies charge rivals as much as 10 times the rate they charge their own customers for roaming mobile voice, data and text services.

"For too long, Canadian consumers in the wireless sector have been the victims of these high roaming costs," Moore said.

The high cost of roaming has had an onerous effect on the newest entrants to Canada's wireless industry, which must rely on the established carriers to provide coverage in many areas of the country.

In a 2008 auction of wireless airwaves, the government set aside spectrum for newcomers in a bid to loosen the dominance of three big providers - Rogers Communications Inc, and BCE Inc and Telus Corp, which share a national network.

Since then, however, the new entrants have found it hard to survive, and some analysts and company executives have complained that government policies have confused and raised concerns among investors weighing a move into the country's telecoms industry.

Public Mobile, one of the new entrants, was recently acquired by Telus, and Mobilicity is currently under creditor protection as it seeks a buyer, leaving Wind Mobile as the last newcomer standing.

Wind's chief legal officer, Simon Lockie, said the new rule showed that the federal government is serious about helping consumers by aiding competition.

"It is now clear that this government is taking the realistic and committed actions necessary to create a level playing field for competition in the wireless space," he said.

The government move preempts a review currently in process at the industry regulator - the Canadian Radio-television and Telecommunications Commission (CRTC) - which in August sought information from all players in the industry on wireless roaming, and has said it will consider next year whether the large Canadian carriers are unfairly imposing more restrictive terms on domestic rivals than on U.S.-based carriers.

The government said its measure would remain in place until the CRTC makes a decision on whether to limit roaming rates.

(Reporting by Alastair Sharp and Euan Rocha; Editing by Bernadette Baum and Theodore d'Afflisio)

Stocks mentioned in the article
ChangeLast1st jan.
BCE INC. 0.26% 64.9 Delayed Quote.20.03%
ROGERS COMMUNICATIONS INC. 1.06% 64.71 Delayed Quote.-9.02%
TELUS CORPORATION 0.29% 47.78 Delayed Quote.5.33%
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