There’s 20 Million Mobile Phone Subscribers in Canada But It’s Not Enough

More than 60% of Canadians have a cell phone, but Canada is still well behind the rest of the industrialized world in adoption. We still pay the highest rates for voice (calling) and the Mobile Web (Internet browsing, email, text messaging, picture messaging…).

So What?

We are missing out on numerous business, educational, entertainment and cultural advances that are already happening around the world. In other countries, development for smart phones is exploding. People are using the Mobile Web for paying bills on public transit. Some are catching up on television shows by watching episodes on their phones. Lives are being saved by medical information transmitted over wireless networks and local economies in the developing world are being created when migrant workers transfer money to family far away!

Canadian government is licensing new spectrums starting today

In November 2007 the Canadian government ruled that cellphone rates were higher and services poorer in Canada than in most of its peer countries, and that this was because there wasn’t enough competition. To address the problem, the Canadian government is licensing new spectrums starting today and in so doing hoping to increase competition and lower prices in Canada’s cell phone market.

Canada’s three big providers — Rogers Communications Inc., Bell Canada Inc. and Telus Corp., — will all be competing in the auction of wireless spectrum. With the addition of Fido customers to its own 3.9 million, Rogers became the country’s largest cellphone provider, with 5.1 million subscribers, worth 11.8 billion in 2006.

Bell, had 4.5 million at the time, while Telus had 3.6 million. But the rules say 40 per cent of the airwaves up for grabs will be set aside for new entrants, opening the door for new regional and possibly national competitors for customers in the wireless industry. Unfortunately due to the recent equity crunch, these “new entrants” are having difficulty raising equity.

But ownership restrictions won’t help

Bidders also face Canadian ownership restrictions, which state that a company must be at least 54 per cent Canadian-owned. This is keeping most big foreign players, such as Britain’s Vodafone Group and Germany’s T-Mobile, out of the auction – read: no volume reductions for Canadians. We will have wait and see if under the rules outlined, the spectrum auction will succeed in setting policy to inject competition to reduce rates, increase mobile adoption, drive net neutrality and open access. The auction has no set duration and will continue until there are no more bids (expect it to take about a month or two).

By the time this is figured out, we’ll have already displaced our land lines, unlocked our smart phones and ignored country segmentation to be riding US carrier’s all-you-can-eat North American plans. For more info, check out my del.icio.u

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