TORONTO – “It was not a take or leave it situation,” Ken Engelhart, senior VP of regulatory at Rogers Communications Inc., says of the roaming agreement the company signed with new entrant Wind Mobile.
In an interview with Cartt.ca Wednesday, he rebutted a number of the points that Simon Lockie, chief regulatory officer at Wind, made during an appearance before the Standing Senate Committee on Transportation and Communications on Tuesday. It’s simply not true that Wind had no choice but to accept the agreement it did, Engelhart says.
“I disagree very strongly with the notion that this was a take it or leave it proposition. It was a fair, open negotiation where they had alternatives. The most important alternative was that arbitration that they spent $500,000 preparing for, so that was totally open to them at any time,” he argues.
Engelhart also notes that because Bell Canada and Telus Corp. were building their HSPA networks at the time – they would have been suitable roaming partners when the networks were finished – Rogers wanted to get the deal done. “We were very worried that Bell and Telus were going to get all the roaming revenue and that was a real concern for us,” he adds.
The roaming agreement also had price de-escalators which would result in lower roaming charges over time. “That’s not something you do if it’s a take it or leave it deal,” argued Engelhart.
Negotiating a deal is almost never easy and neither side gets exactly what they want. But that’s how negotiations work and the one between Rogers and Wind was no different, Englehart contends. “It was a vigorous negotiation that went on for a long time. We gave up a lot of ground and both sides like in any good negotiation worked towards a resolution. At the end of that negotiation, they were satisfied, we were satisfied,” he said.
“Five years later, they’re remembering it all very differently than the way it was five years ago.”
That Lockie complained about the high rates for data roaming puzzled the Rogers executive because during the negotiations Wind didn’t seem to be too concerned about this component and was instead aggressive in trying to get the best possible voice and text roaming rates.
“Now five years later, they’re saying the data rate is too high but it’s not my job to tell them what to worry about. They were worried about voice and text rates and they weren’t worried much about data rates,” Engelhart said.
He also questioned the reason stated by Lockie for Wind spending the $500,000 preparing for the arbitration hearing and ultimately deciding not to go that route. “The reason they didn’t go to an arbitration is because … they knew that the deal that they got was as good as they were going to [get] in an arbitration,” he argued.
“They spend around $3 million a year in roaming. So it’s just not true that their roaming payments have in some way hampered their business case.” – Ken Engelhart, Rogers
Besides, Engelhart added, the amount of money Wind has to pay in annual roaming charges is inconsequential compared to the amount of money the company spent acquiring spectrum and building out its network. (Wind spent $442 million to acquire AWS spectrum in 2008 and has invested a total of $1.5 billion on its network and spectrum assets.)
“They spend around $3 million a year in roaming. So it’s just not true that their roaming payments have in some way hampered their business case,” he stated.
Engelhart acknowledged that roaming rates have decreased “great deal” in the last five years, but adds though that roaming is not resale. “It’s not intended to create a margin for the service provider. It’s intended to give you coverage where you don’t otherwise have coverage,” he says.
The suggestion that the high roaming rate has led to Wind’s inability to build out its network deeper into its licensed territories is also folly, according to Engelhart.
“If roaming is cheap, you’ll build less. If roaming is more expensive you’ll build more,” he says, adding the $3 million a year in roaming charges, or about 1% of Wind’s revenue, “can’t be preventing them from building anything.”
