Why are we Canadians paying so much for our cell phone service? Well, there are a few reasons, but the main one is a lack of competition.

We have an Oligopoly on our cell phone service, Robellus (Rogers + Bell + Telus) refuse to go toe to toe with each other as the last thing each company wants is a price war. They are comfortable agreeing on unofficial pricing minimums and just spitting out different marketing campaigns as a whimsical effort to onboard and steal each other’s customers without really hurting their margin.

The CRTC (Canadian Radio-television and Telecommunications Commission) back in 2008 did restrict some new spectrum from hitting the hands of Robellus. Today this spectrum is managed by Wind in Ontario and Videotron in Quebec. They are offering competitive pricing but as you can imagine the roll out of this higher frequency (1700/2100) is costly. The lower the frequency the longer the radio waves, longer radio waves, in turn, mean fewer towers per square km. 1700/2100 is considered a high frequency when it comes to cell phone operators and will mean many towers are needed to cover a larger footprint.

I work in the telecommunications industry, I’m a Canadian, working for a company called Ting which is an American MVNO but located in Toronto. You’re probably wondering what an MVNO is, well, it stands for Mobile Virtual Network Operator. Basically, what this means is we rent out spectrum from the big guys known as MNOs (Mobile Network Operators). We pay these MNOs (Verizon, AT&T, Sprint, and T-Mobile are the big 4 in U.S.) for how many minutes, texts, and gigabytes we consume across our customer base. We rely on them to maintain and build out spectrum infrastructure and in return, we give them a cheque each month to use their network.

MNOs win plenty in the deal too. MVNOs take customer’s away from their competitors and activate them on their network. If we do end up taking customers away from them the money flows back except the MVNO has now absorbed the cost associated with supporting, activating, and providing devices to these customers. Win-Win.

Now onto Canada. Why is it that no one knows what an MVNO is here? Well, it’s because they don’t exist. Koodo, that’s owned by Telus. Fido, Rogers. Virgin Mobile, Bell. There are no MVNOs servicing Canada.

MVNOs will drive prices down, it will mean us paying less for our cell phones each month while still getting the same coverage quality that we’re used too. MVNOs don’t just need to compete on price, they can fulfill much-needed niche’s in an industry such as offering a WiFi calling apps, bundling of services, providing better customer service, offering competitive long distance rates, etc… etc…

The fact of the matter is people want choice, we want to pay less and we want the internet and technology to move forward in Canada. There are many ways to penetrate this market, so far the government route with the CRTC has not been the ticket.

However, there is one story I’ve been really interested in. There is a new cellphone company in Toronto called Sugar Mobile. They are owned by a larger company called ICE Wireless. You’ve probably never heard of ICE wireless unless you’re from the NorthWest Territories which is where they are currently operating. Back when ICE wireless launched in 2005, they signed a roaming agreement with Rogers. They would share their network with Rogers and in return would be allowed to roam on Roger’s network. What ICE has done is launch Sugar Mobile, a new cellphone service provider offering service in the GTA. The reason why it’s so cheap is because they’re using this old roaming agreement and reselling the service to Ontarians which is likely causing an uproar in the legal department over at Rogers as they work to scupper the budding MVNO. Sugar is a breath of fresh air, however, the pricing plans are not desirable for most as they only offer 200MB of data on their plan.