Globalive (and Wind Mobile) founder adamant national wireless only player the solution
TORONTO – Canadians are more fed up with the nation’s telecommunications industry than they are with airline delays and real estate prices, according to the 2022 Canadian Telecom Sentiment Report, released late last month.
The survey, conducted by Pollara Strategic Insights and commissioned by Globalive, shows 59% of Canadians “are angry or annoyed when they think of telecom companies, the highest of all major Canadian industries surveyed,” a press release announcing the report says.
Furthermore, 71% of Canadians “are angry about telecom bills specifically, the third highest of 13 cost-of-living pressures tested,” explains the release (please see chart below). “Amidst rising interest rates, inflation, and other pressing financial challenges, an overwhelming majority of Canadians (82 per cent) see the lowering of telecom bills as being a responsibility of the Canadian government.”
Other findings from the report include:
- If cellphone bills increased by 10%, 66% of Canadians would deem them unaffordable.
- 14% of Canadians believe the cost of phone plans will decrease and become on par with the rest of the world in the next decade.
- 57% of Canadians have or would consider switching providers multiple times to save money by qualifying for new customer deals.
- 42% of Canadians would consider prepaid plans to save money on their bills.
- 32% of Canadians living in Canada would consider using a U.S. phone plan to save.
The case for Freedom Mobile to be sold to a wireless only player
The survey results are being used to support Globalive founder Anthony Lacavera’s messaging in his campaign to convince the federal government to ensure Shaw Communications’ Freedom Mobile is sold to a pure play wireless player.
Rogers Communications, which is currently seeking regulatory approvals to purchase Shaw, recently came to an agreement to sell Freedom to Quebecor subsidiary Videotron to help quell concerns about the impact of the merger on competition in Canada.
However, while BMO Capital Markets media and telecom analyst Tim Casey said the sale of Freedom to Quebecor is “the best solution available to satisfy the government’s industrial policy” in a note to investors back in August and today the Financial Post reported Scotiabank analyst Maher Yaghi told investors Quebecor’s acquisition of Freedom will likely bring prices down in Ontario, B.C. and Alberta, Lacavera remains adamant it is the wrong move for consumers.
Lacavera himself has been clear he wants to buy back Freedom, which he founded as Wind Mobile in 2009 and sold to Shaw in 2016.
His own bid aside, Lacavera has argued for months the best option for Canadian consumers would be for Freedom to go to someone who will operate it as a national pure play wireless service provider – like T-Mobile in the U.S. (So, not Videotron.)
“I think that it’s just so interesting to now look back at the U.S. market versus the Canadian market,” he told Cartt.ca in an interview.
“When we entered with Wind, T-Mobile wasn’t as much of a force in the U.S. market, they were just sort of starting up the way Wind was starting up,” he said, going on to argue over a decade later the impact is “clear and compelling”.
“The difference between the U.S. market and the Canadian market is that there is a T-Mobile. So, we need a T-Mobile or equivalent in Canada,” Lacavera said.
He is using the Pollara survey to put “data about how disgruntled Canadians are in front of government” while also showing the government the benefits of a wireless-only service provider like T-Mobile are not merely speculative.
Lacavera’s case to the government for a pure play wireless player is largely hinged on lower costs for telecom services being an important issue for Canadians (which is supported by the Pollara survey results) and the argument such a player is the solution to the frustrations of Canadians (which are illustrated by the survey results).
The Pollara survey Globalive commissioned suggests the issue of telecom affordability is top of mind for Canadians and that many believe it should be for the government as well – which is also important for his case.
To his credit, Lacavera is quick to admit the survey results clearly support the argument he has been trying to make – “it just looks way too good for us,” he said, later indicating while they had a pretty good idea what Canadians would say when they commissioned the survey, they “did not expect them to go this much in our favour.”
For skeptics, he points out Pollara, which is an accredited member of the Canadian Research Insights Council, is “a legitimate and well-established polling organization.”
If anything is skewing the data, Lacavera suggests it could be the timing of the survey, which was conducted from Sept. 2-12, 2022 – not long after Rogers had its nationwide outage. (It was also conducted shortly after it was reported Telus asked the CRTC for permission to introduce a credit card processing fee, which inspired thousands of Canadians to write to the Commission in opposition of such a fee.)
Rogers nationwide outage
As part of the survey, Pollara collected data specifically on the Rogers outage. At the time the data was collected, Canadians were still feeling “unsettled and unappeased” by it, according to the press release announcing the survey results.
“A majority of Canadians (56 per cent) claimed to be impacted by the outage in some way, whether personally or professionally; this included communicating with friends or family, communicating with co-workers, making purchases using Interac, and/or using emergency services,” the release explains. Only 35% of Rogers customers felt “they were adequately compensated for their losses and inconveniences.”
“A big part of what Canadians are upset about is things like this outage and things like feeling like our business doesn’t matter to Rogers, Bell and Telus, which it really doesn’t, because they don’t have any competitive pressure that’s pushing them,” Lacavera argued, adding the credit Rogers offered after the outage was “a slap in the face”.
Furthermore, the outage “was 100% avoidable,” Lacavera claimed.
“You have to be underinvesting from the ground up,” he said. “The big equipment manufacturers Nokia, Ericsson, Cisco, Microsoft, the big vendors, build so much redundancy into their equipment that the number of human errors that had to happen at Rogers for there to be a national cascade failure like that – it’s almost inconceivable… it’s a one in 10 billion chance.”
(Cartt.ca reached out to Rogers for a response to Lacavera’s claims the outage was completely preventable and caused by underinvestment in their network. A Rogers spokesperson reiterated the outage was due to routers malfunctioning as a result of a maintenance update in the company’s core network and pointed out Rogers has committed to invest $20 billion over the next five years to enhance reliability. A CRTC spokesperson confirmed the Commission is continuing to investigate the outage even though there has not been anything new on it made public since the end of August.)
For Lacavera, the outage was just more proof Canada needs effective competition and that a wireless-only player is needed to push major service providers to innovate and force them to invest in their networks and provide better customer service. “I think that more resilience is quite possible with real competition,” he said.
And he remains hopeful the government will see things his way. Asked about the potential significance of the government continuing to wait to issue a decision on the Rogers/Shaw merger, Lacavera said: “To me, it’s like they’re screaming from the rooftops by their silence.”
Chart borrowed from full Pollara report with permission from Globalive.
