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This article was published 14/6/2016 (1796 days ago), so information in it may no longer be current.
How important is telecommunications competition for Manitobans?
On May 2, Bell Canada announced it was purchasing MTS for $3.9 billion. Now Canada’s Competition Bureau must determine whether the proposed merger will substantially decrease or prevent competition. As part of this review, the Competition Bureau is inviting comments from Canadians. This is a significant opportunity for Manitobans to have their say about this merger.
Bell says with this merger, Manitobans will enjoy better Internet access, better wireless data and the wireless market may become more competitive. A few weeks after the sale was announced, Bell promised to address gaps in cellular coverage along Highway 75.
Despite these promises, a different story is told by the numbers, and by the experts.
Let’s start with wireless cellphone service. If the sale of MTS is approved, Manitoba’s cellphone landscape will resemble most regions of Canada with three big players in the market. After the MTS-Bell deal, it is estimated Bell will control 40 per cent of the wireless market (currently it has seven per cent), with Telus at 26 per cent and Rogers at 34 per cent. A third of present MTS customers will simply be transferred to Telus under this deal.
Carleton University professor Dwayne Winseck, an expert in telecommunications and media consolidation, says experience around the world shows having four or more wireless rivals results in more competitive pricing and greater service offerings.
Earlier this year, a proposal to reduce competition in the United Kingdom from four to three wireless companies was denied by the European Commission’s competition regulator. In the United States, repeated efforts to reduce the wireless market from four to three companies have been consistently rejected by regulators.
Canadians pay among the highest prices in the industrialized world for wireless service, but Manitoba prices are far lower than the average. Winseck points out MTS has made timely investments in its 4G LTE wireless network that have allowed it to offer good service at a great price. Data from a CRTC-commissioned report shows in 2015, the national average for a 5 GB Talk & Text Plan was $107.50. The prices in Halifax, Montreal, Vancouver and Toronto ranged from $94.76 to $122.21. In Winnipeg and Regina, the only two markets with four major competitors, the prices were $65.76 and $65.62, respectively.
Now let’s examine home Internet. As of 2015, MTS had approximately 55 per cent of the market share for high-speed Internet subscribers in Manitoba. By acquiring MTS, Bell will effectively become the dominant Internet service provider in Manitoba. Does this matter? Yes.
In a recent Environics survey of Manitoba consumers, 75 per cent of respondents believed Bell would try to impose monthly data caps after the MTS takeover, while 87 per cent of the respondents believed regulators should force Bell to continue to offer unlimited data to subscribers after the takeover. Why? Because MTS is the only major Internet service provider in Canada that offers unlimited Internet on any package without extra charges. Will we lose this with Bell?
Bell says it will spend $1 billion over the next five years on broadband, $200 million per year. Yet MTS has been investing approximately $200 million annually for the past half-decade or more. MTS’s investment in high-speed broadband networks in Manitoba has been relatively greater than Bell’s in its home territory for years. Winseck also notes MTS’s profits are in fact higher than Bell’s, while maintaining lower prices. In other words, MTS is doing just fine and doesn’t need Bell. There’s no need for Bell to "save" MTS.
Finally, we turn to TV. MTS has been investing significantly in Ultimate TV, their Internet-delivered service. While the price for a basic cable package in Manitoba is comparable to prices elsewhere, the price for additional channels is likely to rise. MTS currently offers low-priced theme packs, while Bell does not. MTS also offers individual $2 per channel options, while Bell offers this option at $4 or $7 per channel, or $37 for up to 10 à la carte channels.
Bell’s likely more rigid approach to extras may affect the price of TV. How important price, flexibility and choice are for Manitobans could be sorely tested by this deal.
Are the advantages associated with a competitive marketplace worth fighting for? Now is the time to have your say. Tell the Competition Bureau what you think at: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04077.html.
Katrine Dilay is a lawyer with the Public Interest Law Centre, and Gloria Desorcy, is executive director of the Manitoba branch of the Consumers’ Association of Canada.