Rogers Infinte customers surpass 750,000
TORONTO – A handful of Canadian telecom executives didn’t hold back on their thoughts about the CRTC’s ruling on wholesale internet, MVNOs and more during BMO’s 20th Annual Media and Telecom Conference, held Tuesday.
“The [wholesale internet] decision wasn’t as balanced as others we’ve seen. It’s a disappointing decision for anyone in the space,” said Bell Canada president and CEO George Cope. “It will mean a one-time implication for us of around $100 million, which, if we’re putting out that much in cash, we’re going to reduce our rural [internet] footprint as a result. That’s one of the implications of the decision. We feel the [CRTC’s] price point is too aggressive relative to the [cost of the] infrastructure.”
Rogers CFO Tony Staffieri largely echoed Cope’s views on wholesale internet. The company previously disclosed it expected to record a charge of approximately $140 million to account for the retroactive impact of the rate decision. As a result, Rogers said it would undertake a review of “all future investments in rural and remote communities.”
“We’re disappointed the rates proposed are below cost as we’ve been fairly transparent with respect to costs, based on our margins,” Staffieri said Tuesday.
His presentation wasn’t all doom and gloom, however. Staffieri said that while the company is disappointed the CRTC forced carriers to halt their 36-month device financing plans, he lauded Rogers’ industry-leading move to redraw the battle lines for wireless customers via the launch of its Infinite wireless plans this past June.
A little more than a month after launch, Rogers reported 365,000 customers had made the jump to the new plans, a figure Staffieri said has more than doubled since.
“Today, we have almost 750,000 subscribers on these plans,” he said. “We had discussed trying to incent the market to migrate [customers onto the Infinite plans] but that’s been happening on its own.”
Cope acknowledged his company hasn’t been completely in step with matching price plan changes dollar for dollar, saying, “we haven’t followed competitors [pricing] as aggressively because we’ve got to build some programs to be fully competitive.”
On the subject of new wireless competition, Cope expressed a healthy dose of skepticism on the subject of another type of network wholesaler: MVNOs (mobile virtual network operators). This topic will be front and centre at the CRTC hearing on the review of the Canadian wireless market slated to take place in January 2020.
“I think it would be hard to show a compelling reason as to what the economic benefit to Canada will be… especially on the doorstep of 5G. Our view is that the market is as competitive as it’s ever been and the infrastructure builds are the largest they’ve been in years. There is no other country in the G7 offering speeds close to what we’re offering on wireless,” Cope said.
Staffieri says Rogers also remains puzzled by the potential introduction of MVNOs into the Canadian landscape and what assumed problem it would solve.
“We have some very healthy competition with well-capitalized players in each of the markets, and we continue to see healthy competition in terms of pricing,” Staffieri said. “On a per-GB basis, pricing has come down considerably over the last number of years. We look to the U.S., where they’ve moved to three facilities-based competitors with no mandated MVNO and it seems to be a healthier market with no industry consolidation.
“We’re not asking for charity to access networks, we’re asking to access the networks at a fair and reasonable cost so we can build our footprint.” – Philippe Jetté, Cogeco
“I’m not sure what problem [government] is trying to solve, but at the same time, the government has done a lot to subsidize the fourth player in the country. We just hope all of these various things are factored into the mix. We take comfort in the fact this government has been focused on facilities-based competition. We think it’s important and think they will take a look at the investment cycle,” Staffieri explained.
Cope said he is confident regardless of which party emerges victorious in the upcoming federal election, facilities-based competition has been supported by both Liberal and Conservative governments in the past, and will continue to be supported in the future. “Whichever government wins, we’ll work with them as we have in the past. I’m completely optimistic the parties that have been in office understand the importance of facilities-based competition. We’ll find the right balance,” Cope said.
Cogeco CEO Philippe Jetté offered a bit of an alternate view of MVNOs, noting his company doesn’t support the idea of wireless resellers, but would like to see smaller companies, such as Cogeco, afforded the opportunity to broaden their product offerings with a beefier MVNO model.
This past May, in its submission to the CRTC, Cogeco noted while facilities-based competition delivers a combination of competition and investment, building a mobile wireless network from the ground up is a “massive and improbable undertaking.”
“We’re not asking for charity to access networks, we’re asking to access the networks at a fair and reasonable cost so we can build our footprint,” Jetté said. “We want the regulator to limit anti-competitive behaviours from the three large players and also allow a reasonable fee to access their network while we build, over time, our wireless footprint.
“The end stage of this is that we will have a regional wireless position, similar to what Shaw and Videotron have done. We’re prepared to invest in our own (wired) footprint and don’t plan on building outside those areas.”
