By Ahmad Hathout
Rogers has filed an application requesting that the CRTC reverse its decision to expand the mobile virtual network operator (MVNO) regime to internet of things (IoT) and enterprise services.
The market for those services, claims Rogers in its application to review-and-vary posted last week, “is likely one of the most competitive markets for telecommunications services in the country. Beyond Canada’s domestic national and regional [wireless service providers], there are literally hundreds of service providers, including global wireless carriers, global and regional IoT/M2M aggregators of MVNOs, and global and regional IoT/M2M solutions providers in the Canadian market.”
The regulator affirmed in October its preliminary view that the IoT segment, which includes the machine-to-machine market, and the enterprise market, defined as companies with 100 or more paid employees, see similar market dynamics as the rest of the sectors under regulation – that is, a concentration of market power in the hands of incumbents Rogers, Bell, Telus, and SaskTel. In other words, more competition is needed in the segments, it said.
In its decision, the commission said it didn’t consider “relevant” the presence of the “various global service providers in the Canadian IoT market when assessing the degree of market concentration or competitiveness. “Ultimately, any competitor, global or domestic, must have access to a RAN and only the incumbents can provide that access with the coverage needed to compete effectively.”
The decision was an expansion on the original 2021 decision by the commission to mandate regional provider access to the incumbents’ wireless networks to boost competition in the space.
But Rogers says this is an unjustified dismissal in part because the presence of these players in the market is proof that they have had no issue with getting RAN access. “In fact, global MNOs and MVNOs often have wholesale arrangements with two or more of Rogers, Bell and Telus so as to maximize their pricing leverage and geographic coverage,” Rogers says in its application.
“There is zero evidence that the national WSPs would ever shut out these existing resellers from accessing their networks,” the cable giant says in its application. “There is also no evidence that existing MVNOs are not highly effective competitors.”
There are Canadian businesses that get IoT connectivity from Canadian mobile network operators (MNOs) like Rogers, Bell and Telus and then resell the service with an IoT application, Rogers says. And then there are international businesses operating in Canada by sourcing their IoT connectivity from global mobile operators, who offer incentives to new customers. Canadian MNOs, therefore, must additionally compete with these players, it adds.
Rogers notes that the CRTC said many of these service providers are only able to operate in the Canadian market because they provide reciprocal roaming or network access agreements in their home countries. But Rogers, citing a report used in a Telus intervention, says many existing MVNOs don’t have facilities to provide reciprocal services: Soracom, Emnify, and Telit are the IoT company examples Rogers provides. (The large telecoms filed interventions opposing the expansion of the MVNO regime to IoT and enterprise customers.)
These services include large-scale automation for automotive and fleet management industries, both among sectors like farming that are using 5G wireless technology to conduct more efficient business.
“This dynamic, vibrant, and crowded market developed in the absence of any regulatory mandate,” Rogers says, adding no evidence was put forth to contradict the “importance of these existing resellers” in this market.
“They are formidable competitors that provide highly differentiated end-to-end services to the retail M2M/IoT market at competitive pricing,” Rogers adds. “There is no economic, legal, or logical reason to exclude them from the analysis.”
Rogers alleges the CRTC made no attempt to analyze the dynamics at play, including an assessment of prices or profits.
“In the absence of such a finding, there is no evidentiary foundation for the conclusion that buyer power is ‘insufficient’ to discipline prices in the relevant markets, or for a finding that regional carrier entry or expansion is likely to have any material impact on prices in these markets,” Rogers says.
