Hold the phone, providers and regulators – Canadians care about wireless competition

By Shachi Kurl, Executive Director

May 4, 2016 – The $3.1-billion deal for the purchase of Manitoba Telecom Services Inc. by Bell Canada Enterprises Inc. prompts the question of whether Manitobans should be bracing for a particularly staticky kind of cellphone sadness this summer.

Indeed, the deal may cause concern not just among consumers and industry watchers in one province, but across the rest of the country, given what it might mean to monthly mobile bills and customer choice.

For example, take the fact that the agreement will see BCE assign 140,000 – about one-third – of its new MTS postpaid cellular subscribers to Telus Corp., which has only about 10 per cent of the province’s market share. BCE will also assign one-third of MTS’s Manitoba dealer locations to Telus.

This isn’t automatically bad news for the customer, but my colleagues and I at the Angus Reid Institute have been watching the telecom file for a long time. Last month, we self-commissioned and conducted a national public-opinion poll on matters directly related to the type of purchase that BCE has announced.

What we’ve found indicates more potential for hand-wringing than for high-fiving. Consider that roughly half of Canadians (55 per cent) and Manitobans (49 per cent) say there isn’t enough competition in the cellphone business sector as a whole.

Among them are approximately half a million current MTS subscribers who are absorbing the news that they’ll soon be sending monthly payments to a provider they specifically did not sign up with.

Beyond choice, the other major potential impact of less competition is, of course, price. The majority of Canadians – 61 per cent (and this number is consistent in Manitoba) – say mobile plans are too expensive.

Providers might be tempted to simply dismiss this as a sentiment held about everything – especially in the face of ever-increasing economic uncertainty and historically high levels of personal debt. But those six in 10 respondents were more than twice as numerous as those who say their plans cost “about the right price” (19 per cent) or are “a good deal” (8 per cent).

This lack of satisfaction around pricing and choice extends beyond cellphones. We see similar unhappiness among Canadians in recent polling on how they gain access to programming and information – especially in the wake of recent Canadian Radio-television and Telecommunications Commission-mandated changes to offer more basic (and basically priced) TV bundles.

What hasn’t yet come into sharp focus is whether the fallout from the BCE-MTS deal will land on the companies themselves or with the regulators and government bodies tasked with weighing the takeover.

Among others, the transaction will need the go-ahead of the Competition Bureau, the CRTC and the Ministry of Innovation, Science and Economic Development. But it is the CRTC’s mandate and performance that sits in the crosshairs of public opinion. A another self-commissioned Angus Reid Institute study from March of last year indicated that Canadians attach more importance, and less positive performance measures, to the commission’s mandate as a consumer protection organization.

Then, 57 per cent of Canadians put “regulating cellphone companies’ billing practices” – such as roaming charges and contract length – at the top of the CRTC’s priority list. But more gave poor marks to the commission regarding performance on this front than high ones. About one-third (31 per cent) of Canadians said they see the CRTC as less relevant today than it was a generation ago, compared with the 24 per cent who said they see it as “more relevant than ever.”

Indeed, government reviews of the BCE-MTS merger will be of extreme relevance to customers affected by this multi-billion-dollar deal. The outstanding question in coming conversations hinges on whether providers and regulators will pick up on consumers’ concerns or let them go straight to voice mail.

This article originally appeared in the Globe and Mail on May 2, 2016.

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