Winnipeg Free Press - PRINT EDITION

Canadian telcos warn of wireless 'loopholes'

Verizon could enter market via small carriers

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MONTREAL -- Canada's wireless carriers may have to cut jobs to compete with Verizon if the U.S. telecom giant enters the marketplace under "loopholes" that would give it preferred treatment, the head of Bell Canada said Thursday.

Bell has joined major telecom companies Rogers and Telus in calling for Ottawa to change its policy on foreign ownership of small Canadian wireless companies.

The three Canadian rivals say they are at a disadvantage that allows foreign carriers like Verizon to buy small Canadian wireless carriers while denying them the same opportunity.

"From my perspective, it will ultimately cost jobs in Canada because my belief is when someone enters a market through a subsidized position, they have a competitive advantage," BCE CEO George Cope said in an interviewfrom Toronto.

Verizon, which has more than 100 million wireless customers, has said it's still eyeing the possibility. There have been reports Verizon is planning to buy new carrier Wind Mobile, while also in talks with financially struggling Mobilicity -- two of the new generation of wireless carriers.

In June, Ottawa blocked major carrier Telus from buying Mobilicity and made it clear it wants four wireless competitors in every region.

Analyst Iain Grant said Rogers, Bell and Telus are reacting with "fear."

"Anything that makes the three bullies a little bit afraid is something that Canadians should celebrate," said Grant, managing director of the SeaBoard Group.

He said wireless prices will come down if there is more competition.

Foreign ownership restrictions have been removed for small wireless companies with less than 10 per cent of the market, which opens the door for Verizon and other foreign companies to enter Canada.

"We do not believe a U.S. company that is four times the size of Canada's entire wireless industry combined requires special help from Canadians. It's profoundly unfair to all Canadians, and Ottawa needs to close the loopholes," Cope said in an open letter to Canadians on Thursday.

Bell, Telus and Rogers have about 25 million customers between them.

The federal government repeated its message on Thursday that it wants increased competition.

"Our government's view has been clear. We want effective competition across Canada," said Sebastien Gariepy, a spokesman for Industry Minister James Moore.

"Greater competition means better prices for Canadian consumers."

 

-- The Canadian Press

Republished from the Winnipeg Free Press print edition July 26, 2013 B14

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