The news broke yesterday that Verizon will not be saving Canada from its incumbent carriers, choosing instead to buy out the rather large stake owned by UK-based Vodafone. You’ll be reading lots about this in the news today, but the way I see it one reaction will trump all others, and it will come from Industry Canada — specifically, Industry Minister James Moore.
Our government and wireless industry have waged a very high profile war of words against each other over the past month, and the unspoken message lost therein seems to be that the 2008 spectrum auction has failed.
Remember 2008? Thanks to a set-aside of AWS spectrum there was a small batch of new carriers setting up shop in 2010. Most notable among them were Mobilicity and WIND Mobile, offering unheard of unlimited service at amazingly low prices. The only gotcha was their small footprint, limited to urban areas.
Fast forward to the summer of 2013 and these upstart carriers are making news mostly as targets for acquisition. Mobilicity came very close to a friendly takeover by Telus before Ottawa stepped in and shot it down; WIND had its own takeover hopes dashed for different reasons. More importantly, with just over a million subscribers between them, neither has made a sizable dent in the Big Three’s marketshare. The newest versions of the iPhone 5 now work on both networks, yet nobody seems to know this — not even a friend who works at my local Apple Store!
The Big Three and its lobbyists have good reason to point an accusing finger at our meddling government, calling out its 2008 set-aside policy as a bust. And with another set-aside failure looming on the horizon, what’s a Minister Moore to do?
Backing down is clearly not an option. This government has generated a fair amount of goodwill for its pro-consumer wireless policies to date. To suddenly reverse their stance would be a great loss of face, and make a great talking point for opposing parties in the next federal election.
Legislating some spectrum to a company that’s already in Canada is certainly an option, but you already know about that.
The only other obvious course of action is opening the floodgates to anyone. T-Mobile, NTT DoCoMo, China Mobile, come on down… get your deposit in for the wild card slot in Canada’s 2014 700 MHz auction! All spectrum must go!
Is it really worth it for a foreign telco to set up shop here, though? WIND Mobile backer Naguib Sawiris has very famously said no — though that may have just been public posturing for some unknown purpose. He’s got a point, though; with vast swaths of land to cover and three powerful and entrenched competitors, how attractive is Canada for an outsider?
Hopefully Minister Moore has an answer for this, because I sure don’t…