I got this question in my inbox late last night:
Hello IT Nerd. Why would the government go through the trouble of setting up a second spectrum auction that is heavily slanted towards the struggling wireless carriers in Canada? Will this attempt work?
Thanks very much.
Thanks for the question. The reason is simple. Efforts by the Canadian Government to lower cell phone prices in Canada have quite simply failed miserably. This is their last roll of the dice to do something that they’ve been promising for years before they have to go to the electorate in the second half of 2015. If they don’t solve this now, one of the opposition parties will call them on it.
Now will this roll of the dice work? I seriously doubt it. The problem is that they’re going about it wrong. This might sound familiar to frequent readers of this blog, but what the Canadian Government needs to do is convince a big telco like Vodafone, O2, Orange, or Deutsche Telekom (aka: T-Mobile) to come in and set up shop in Canada. That’s best done by changing the foreign ownership rules and offering incentives so that it makes sense from a dollars and cents perspective to set up shop. If that happens, the big three will drop prices so fast, you’ll suffer whiplash. That’s because a big foreign telco will actually force the big three to be competitive. I seriously doubt a fourth carrier that’s made in Canada so to speak can do the same thing.
Of course, I’m willing to be proven wrong. We’ll just have to wait until 2015 to see if I am or not.
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This entry was posted on July 8, 2014 at 6:30 am and is filed under Commentary with tags Canada, wireless. You can follow any responses to this entry through the RSS 2.0 feed.
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Hey IT Nerd! What’s Up With This Spectrum Auction?
I got this question in my inbox late last night:
Hello IT Nerd. Why would the government go through the trouble of setting up a second spectrum auction that is heavily slanted towards the struggling wireless carriers in Canada? Will this attempt work?
Thanks very much.
Thanks for the question. The reason is simple. Efforts by the Canadian Government to lower cell phone prices in Canada have quite simply failed miserably. This is their last roll of the dice to do something that they’ve been promising for years before they have to go to the electorate in the second half of 2015. If they don’t solve this now, one of the opposition parties will call them on it.
Now will this roll of the dice work? I seriously doubt it. The problem is that they’re going about it wrong. This might sound familiar to frequent readers of this blog, but what the Canadian Government needs to do is convince a big telco like Vodafone, O2, Orange, or Deutsche Telekom (aka: T-Mobile) to come in and set up shop in Canada. That’s best done by changing the foreign ownership rules and offering incentives so that it makes sense from a dollars and cents perspective to set up shop. If that happens, the big three will drop prices so fast, you’ll suffer whiplash. That’s because a big foreign telco will actually force the big three to be competitive. I seriously doubt a fourth carrier that’s made in Canada so to speak can do the same thing.
Of course, I’m willing to be proven wrong. We’ll just have to wait until 2015 to see if I am or not.
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This entry was posted on July 8, 2014 at 6:30 am and is filed under Commentary with tags Canada, wireless. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.