Canadian Regulator Prohibits Exclusivity in Roaming Agreements

As it prepares for a September review of the competitiveness of Canada’s wholesale roaming rates, the Canadian Radio-television and Telecommunications Commission (CRTC) has issued a ban on exclusive wireless roaming agreements within the country. The regulator took action to forbid this aspect of the roaming pacts after learning that Rogers Communications—Canada’s largest mobile operator—created agreements containing inequitable clauses that negatively affected start-ups and smaller operators. The CRTC said it found “clear instances of unjust discrimination and undue preference” by Rogers. The regulatory commission claims that the operator is charging new industry entrants higher roaming rates than it charges Canada’s two other large nationwide carriers and U.S. providers. The CRTC is also charging that exclusivity clauses in the Rogers roaming agreements have prevented smaller industry players from negotiating more affordable rates and agreeable conditions with other operators.

The Canadian mobile market is a “tale of two cities” in which smaller regional providers and new entrants have to play by different rules than the big three nationwide operators. The CRTC’s recent ban on exclusivity clauses, as well as the new rules implemented in June specifying that operators need to create roaming deals based on a formula that calculates caps for wholesale roaming rates, are attempts to rectify the unfair conditions that Canada’s secondary operators are facing. As the regulator recognizes, the smaller operators have been at a disadvantage in the country’s mobile market; they have higher operating costs, which ultimately lead to higher prices and poorer roaming coverage for their customers.

According to the CRTC chairperson, “Competition in the wireless industry benefits society and the economy by providing innovative communications services at reasonable prices. But that is only the case when true and sustainable competition is at play.” Several years ago, Canada’s government reworked some of the provisions guiding the telecom industry to allow the smaller players to enter the market and enhance competition. It is now evident that these recent actions by the CRTC are necessary to allow regional operators to become more competitive and attain revenue levels that are closer to those of Canada’s dominating MNOs.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx