9 ms·

Canada's Telecom Market is Rigged, says Wind Mobile backer Naguib Sawiris

115 points by jsnk 15y ago

FreeKill 15y ago
I doubt anyone who has ever had to deal with one of the big 3 in Canada (Rogers, Telus, or Bell) would argue against this point. Canadians really need to push for an open system that allows foreign competition to enter the marketplace. Until we do, the status quo is simply going to continue to press the advantage they have at the expense of the Canadian consumers.
- JonLim 15y ago
  I would love to have an idea of what we CAN do. This is the one thing in my life where I can't vote with my wallet. I only really have three viable choices for wireless right now: Rogers, Bell, and Telus.
  - mmphosis 15y ago
    I would propose opening up your wireless network, adding to the mesh, and creating more networks. Build out as much fiber and cable locally, close to home. Link up your community with like minded individuals seeking another choice for internet. With enough big community networks in place, there is no need to pay big phone/cable corporations.
  - mladenkovacevic 15y ago
    Have you tried one of the small guys struggling to compete against the big 3? Mobilicity, Wind or Public Mobile. I am with Mobilicity and pay $35 for unlimited everything (one of the amzing early plans they had.. you can still get he same for $40 or so) and that includes data, global text messaging and North American long distance.A couple of caveats are that plans are metro-area limited so if you go out of any of their zones (Toronto, Vancouver, Ottawa, Calgary...) you are roaming at about 25 cents per minute and if you need fast data forget it (highest I get is about 3Mbit/s). Some changes are coming though so all of us with the little carriers are kinda unsure what's going to happen - Mobilicity's CEO was just fired, CRTC declared that the small guys have to bid for the same LTE spectrum along with the big 3 (which is what the main Wind investor in the article above is complaining about).
    - JonLim 15y ago
      I really wanted to go with Wind when they came out, but none of the new providers would let me use an iPhone on their system, which meant that they were instantly out of the running. Sounds silly I know, but I want to keep using the phone I'm using.
- ataggart 15y ago
  The problem is so many of those inclined to oppose the government-protected big 3 cartel are also the same sort who think the solution to every problem is a government monopoly. Any push for change would not move to a more open system, but would at most replace it with a Crown Corporation.
nobody31415926 15y ago
In other news - bears discovered to shit in the woods and pope a catholic shock discovery.
feralchimp 15y ago
#define regulatedMarket marketRiggedForEstablishedPlayers
- nobody31415926 15y ago
  Even worse in canada - all incoming firms have to be Canadian owned and financed. Try raising the money for a nation wide set of phone masts if you aren't allowed overseas investors
snowwindwaves 15y ago
new zealanders have a rough go with their telecommunications as well. I recall seeing the vodafone CEO on the news saying they made 3-4x as much profit in new zealand as anywhere else (per customer probably). The only competion was the ex-public telecom. canadians don't have it quite so bad as the new zealanders, but they get a worse deal than the americans for sure.
- wavephorm 15y ago
  Canada has BY FAR the most expensive cell phone rates in the world. New Zealand is 19th according to this list. See: http://www.mobilemag.com/2010/08/27/canadians-have-the-most-expensive-cell-phone-bills-in-the-world/ http://www.mobilemag.com/2010/08/27/canadians-have-the-most-... That graph doesn't even give justice to the true cost. Canada plans are almost always regional, so to call another city, even one nearby is a long distance call. VOIP phones are also rare because numbers are restricted, Skype and Google Phone do not exist here. Canada's telecom industry can accurately be described as a mafia-style public cartel.
  - masklinn 15y ago
    > Canada has BY FAR the most expensive cell phone rates in the world. New Zealand is 19th according to this list. Technically, the graph is not about rates though, it's about average bill. So countries with higher prices who don't use cells much (on population averages) would have a "better" ranking than countries with lower prices where cell phone use is ubiquitous and permanent. > Canada plans are almost always regional, so to call another city, even one nearby is a long distance call. The fuck? The concept of "long-distance" call still exists in canada? I'm shocked.
    - wavephorm 15y ago
      That's what I'm saying, its worse than those numbers make it look. Canada has the highest average cost, and because a Canadian regional plan is more expensive than a nation-wide long distance plan in the US it is masking the true cost. Canadians can't afford to use their phones, so they typically don't make anything but quick calls or text messaging.
deleted 15y ago
[deleted]
deathchill 15y ago
It's almost as terrible as the car insurance market in BC: http://ihateicbc.com/icbcs-dirty-little-secret.html http://ihateicbc.com/icbcs-dirty-little-secret.html BC only has one car insurance provider so they're free to set the prices as they see fit. They even try and pretend that they're doing it to help keep prices low as competition would only raise the prices for everyone (yes, they really said this).
- nobody31415926 15y ago
  They did it because they made motor insurance mandatory and it would be unfair to force someone to have something that the market didn't have to provide. In europe it's essentially impossible for anyone under 21 to get insurance ( without tricks like being listed on parent's cover ) even though the law says you can drive at 17. Typical rates for liability-only on a 17 year old are $10K/year Imagine living in a rural part of BC where work and shopping is 20 miles away and the insurance companies all charge $10K for drivers under 21. Yes it's unfair that as a middle age driver I pay 2-3x as much as I would in europe in order to cover a west vancouver millionaire's kid in a ferrari. But it's also unfair that I'm paying for elementary schools for someone else's kid or subsidizing somebody else's cancer treatment.
  - snowwindwaves 15y ago
    The difference in car insurance from vancouver to victoria is 50%. People drive more expensive cars in vancouver and apparently are more likely to have accidents.
    - nobody31415926 15y ago
      And nobody in Victoria drives at more than 30km/h !
  - alsocasey 15y ago
    Hold the phone, motor vehicle insurance isn't mandatory in the US?
wmougayar 15y ago
This definitely sucks for Canada. The Telco's and the antiquated regulation that protects them are big gatekeepers to progress and innovation. How do we break out of this deadlock?
- zmanji 15y ago
  One has to fix the prime example of regulatory capture that is the CRTC. This can be achieved by either changing the current management or drafting more legislation.
  - freejack 15y ago
    IIRC, there are only a few commissioners who don't come from Canada's media/telco industries. i.e. the commission is mostly populated by insiders from the industries that the CRTC purports to oversee and regulate. Fox, henhouse, etc. http://www.crtc.gc.ca/eng/about/commissioners.htm http://www.crtc.gc.ca/eng/about/commissioners.htm
    - zmanji 15y ago
      The question that I always have is, how can we find people who have the knowledge to regulate the telco industry but who have not worked in the telco industry in a large capacity before?
      - a3camero 15y ago
        Research in Motion employees, other electronics companies. How about just business people? People who've worked for foreign cell/telecom companies who want to move back to Canada. IT experts who've worked with the infrastructure. Lawyers in the industry who work for private law firms (biased, but less so probably). There are plenty of people who would be a better choice than someone who's worked for an incumbent player.
loceng 15y ago
It keeps competitors out. Many governments do this. Keeps jobs and profits local, for the most part.
- noarchy 15y ago
  For the most part, maybe. Tell that to the Bell customers who deal with Indian call centres when they need tech support. I know I did, years back (haven't dealt with Bell in a while).
  - cheez 15y ago
    Heh, I know the guy who piloted that way back. He still gets royalties.
zmanji 15y ago
I've never understood why in many western industrialized countries telecommunications has not been regulated the same as sewage, roads, electricity, etc. It is a vital piece of infrastructure in the 21st century and it should be the responsibility of the government to manage such infrastructure.
- snowwindwaves 15y ago
  we used to have that, and while the service of providing roads, electricity, or sewerage hasn't changed much in the last 100 years, telecommunications certainly has. while networks might lend themselves to natural monopolies, government sponsored telecommunications monopolies couldn't keep up with the pace of innovation these days and as a result consumers would be left paying high rates for antiquated service.
  - zmanji 15y ago
    Right now in Canada I am paying high rates for antiquated service. There is still long distance, I have to pay extra for voicemail + caller id, etc. I agree that government sponsored monopolies probably could not keep up with the pace of innovation. However in industries where natural monopolies occur, I think they are the better solution then private enterprise. In Canada, it used to be that receiving text messages was free. However, one of the three carriers decided to charge for incoming texts. Sure enough, in less than a year, the other two carriers followed and also charged for incoming texts. I have a strong feeling to say that sort of behavior would not occur if there was a government sponsored monopoly. The obvious solution is better regulation, but I don't think anyone has found a solution to regulatory capture yet so I'm not banking on anything there.
    - phillmv 15y ago
      Hang on. There are many aspects which the government should regulate (common carrier status for internet, anyone?) but I think that in this aspect our biggest problem is that the barrier for entry in the Canadian market is too high, and so it's exceedingly difficult to disrupt. Because there's such a lack of competition the big telcos get to basically collude with each other.
1010010101 15y ago
This is meant to be a legitimate question, not sarcasm: Are there any countries where telecom is not "rigged"? That is, places where an entrepreneur could enter the market and the incumbents by and large would play "fair"?
jbarham 15y ago
By way of comparison, I'm living in Melbourne, Australia, and pay $55/month for the Nexus S w/ unlimited calls within Australia (including to other mobile phones), unlimited texts (IIRC) and 500 MB of data. That's for a one-year plan w/ Vodafone, and I didn't pay anything up-front for the phone. Needless to say I'm looking forward to upgrading to the Galaxy Nexus soon. :) My wife has the the same phone and same plan for two years and pays $45/month. The Australian mobile phone market is very competitive, and it has a number of foreign players (e.g., Optus, Vodafone, Virgin). Australian fixed-line telecommunications are much less competitive due to the legacy stranglehold of the former government monopoly, Telstra. IMO Canadians are far too complacent about government sanctioned monopolies or oligopolies (e.g., car insurance in BC, alcohol sales are provincial government monopolies, dairy product quotas, wheat board monopoly) that means they pay more for less choice, supposedly for their own good, when in reality it just enriches an old-boys network of politically well-connected players and condemns the protected industries to being being unable to compete internationally. FWIW I'm Canadian.
- maximilianburke 15y ago
  BC insurance, from my experience, isn't really a problem. Most quotes I've received in markets where there is a free(r) market for insurance often are considerably higher than what BC drivers pay through ICBC, especially if the driver is under 25. Case in point, I renewed my auto insurance today with ICBC and paid $1470 for 12 months of insurance for a 2007 Mazda 3. The policy includes $2,000,000 liability, collision and comprehensive coverage with $300 deductibles, plus rental car coverage. In the last five years I was rear-ended at a stop light and my car was vandalized once. The equivalent quote from Geico was $2385 which only included $500,000 of liability insurance.
  - phillmv 15y ago
    Public insurance has a leg up: because the risk pool is greater it can hedge the risks more efficiently.
  - refurb 15y ago
    The reason you are paying lower rates is because the gov't has stepped in and ensured it. Well that and the gov't pays out insurance claims, so it can often limit the huge payouts. The problem is is that when you benefit one group (young drivers), you're usually making someone else pay the difference (lower risk drivers). There is no free lunch.
dhughes 15y ago
I have cell service with Bell Aliant (eastern Canada) and my data is horrible! My phone a Samsung Galaxy SII on Bell's HSPA+ network which from what I understand can be anywhere from 21Mbps to 42Mbps but my phone is only capable of a max of 21Mbps. I don't expect to get 21Mbps or even 15Mbps but most days it's 0.3 or 1Mbps maybe 5Mbps to 9Mbps on a good day. Outright lies or incompetence or both to say such a thing and not have anywhere near what they promise. Bell's excuse is the network is busy with other users but I test it at all hours of the day and each day and weekend but it's never consistent. They advertise "HSPA+ 21Mbps" but make excuse after excuse once you're a customer that you'll never ever see that. I complained to the CRTC Donna Shewfelt Client Services wrote back to me gave me a case number 'CRTC Case ID: 548491' but then "The telecommunications industry has established an independent consumer agency, the Commissioner for Complaints for Telecommunications Services (CCTS)" and "Given the concerns you have raised, we believe this complaint is more properly within the scope of the CCTS and have forwarded your complaint to them." That was September 22 of this year (2011) and not one reply since then from any of them.
napierzaza 15y ago
That is indeed Canada. Try and get DSL or cable internet here too. It's terrible. Bad service, bad price.
- jackvalentine 15y ago
  Can you give me some concrete examples of this? I have a lecturer at university who constantly harps on about "canada doing it right" with broadband access and I've always had the feeling that he has no idea what he's talking about. I'd love to go head-to-head with him next year over the topic. This guy: http://www.politicalscience.com.au/ http://www.politicalscience.com.au/ http://www.politicalscience.com.au/p/my-media.html http://www.politicalscience.com.au/p/my-media.html

115 points by jsnk 15y ago

I doubt anyone who has ever had to deal with one of the big 3 in Canada (Rogers, Telus, or Bell) would argue against this point. Canadians really need to push for an open system that allows foreign competition to enter the marketplace. Until we do, the status quo is simply going to continue to press the advantage they have at the expense of the Canadian consumers.

JonLim 15y ago
I would love to have an idea of what we CAN do. This is the one thing in my life where I can't vote with my wallet. I only really have three viable choices for wireless right now: Rogers, Bell, and Telus.
- mmphosis 15y ago
  I would propose opening up your wireless network, adding to the mesh, and creating more networks. Build out as much fiber and cable locally, close to home. Link up your community with like minded individuals seeking another choice for internet. With enough big community networks in place, there is no need to pay big phone/cable corporations.
- mladenkovacevic 15y ago
  Have you tried one of the small guys struggling to compete against the big 3? Mobilicity, Wind or Public Mobile. I am with Mobilicity and pay $35 for unlimited everything (one of the amzing early plans they had.. you can still get he same for $40 or so) and that includes data, global text messaging and North American long distance.A couple of caveats are that plans are metro-area limited so if you go out of any of their zones (Toronto, Vancouver, Ottawa, Calgary...) you are roaming at about 25 cents per minute and if you need fast data forget it (highest I get is about 3Mbit/s). Some changes are coming though so all of us with the little carriers are kinda unsure what's going to happen - Mobilicity's CEO was just fired, CRTC declared that the small guys have to bid for the same LTE spectrum along with the big 3 (which is what the main Wind investor in the article above is complaining about).
  - JonLim 15y ago
    I really wanted to go with Wind when they came out, but none of the new providers would let me use an iPhone on their system, which meant that they were instantly out of the running. Sounds silly I know, but I want to keep using the phone I'm using.
ataggart 15y ago
The problem is so many of those inclined to oppose the government-protected big 3 cartel are also the same sort who think the solution to every problem is a government monopoly. Any push for change would not move to a more open system, but would at most replace it with a Crown Corporation.

nobody31415926 15y ago

In other news - bears discovered to shit in the woods and pope a catholic shock discovery.

feralchimp 15y ago

#define regulatedMarket marketRiggedForEstablishedPlayers

nobody31415926 15y ago
Even worse in canada - all incoming firms have to be Canadian owned and financed. Try raising the money for a nation wide set of phone masts if you aren't allowed overseas investors

snowwindwaves 15y ago

new zealanders have a rough go with their telecommunications as well. I recall seeing the vodafone CEO on the news saying they made 3-4x as much profit in new zealand as anywhere else (per customer probably). The only competion was the ex-public telecom. canadians don't have it quite so bad as the new zealanders, but they get a worse deal than the americans for sure.

wavephorm 15y ago
Canada has BY FAR the most expensive cell phone rates in the world. New Zealand is 19th according to this list. See: http://www.mobilemag.com/2010/08/27/canadians-have-the-most-expensive-cell-phone-bills-in-the-world/ http://www.mobilemag.com/2010/08/27/canadians-have-the-most-... That graph doesn't even give justice to the true cost. Canada plans are almost always regional, so to call another city, even one nearby is a long distance call. VOIP phones are also rare because numbers are restricted, Skype and Google Phone do not exist here. Canada's telecom industry can accurately be described as a mafia-style public cartel.
- masklinn 15y ago
  > Canada has BY FAR the most expensive cell phone rates in the world. New Zealand is 19th according to this list. Technically, the graph is not about rates though, it's about average bill. So countries with higher prices who don't use cells much (on population averages) would have a "better" ranking than countries with lower prices where cell phone use is ubiquitous and permanent. > Canada plans are almost always regional, so to call another city, even one nearby is a long distance call. The fuck? The concept of "long-distance" call still exists in canada? I'm shocked.
  - wavephorm 15y ago
    That's what I'm saying, its worse than those numbers make it look. Canada has the highest average cost, and because a Canadian regional plan is more expensive than a nation-wide long distance plan in the US it is masking the true cost. Canadians can't afford to use their phones, so they typically don't make anything but quick calls or text messaging.

deleted 15y ago

[deleted]

deathchill 15y ago

It's almost as terrible as the car insurance market in BC: http://ihateicbc.com/icbcs-dirty-little-secret.html http://ihateicbc.com/icbcs-dirty-little-secret.html BC only has one car insurance provider so they're free to set the prices as they see fit. They even try and pretend that they're doing it to help keep prices low as competition would only raise the prices for everyone (yes, they really said this).

nobody31415926 15y ago
They did it because they made motor insurance mandatory and it would be unfair to force someone to have something that the market didn't have to provide. In europe it's essentially impossible for anyone under 21 to get insurance ( without tricks like being listed on parent's cover ) even though the law says you can drive at 17. Typical rates for liability-only on a 17 year old are $10K/year Imagine living in a rural part of BC where work and shopping is 20 miles away and the insurance companies all charge $10K for drivers under 21. Yes it's unfair that as a middle age driver I pay 2-3x as much as I would in europe in order to cover a west vancouver millionaire's kid in a ferrari. But it's also unfair that I'm paying for elementary schools for someone else's kid or subsidizing somebody else's cancer treatment.
- snowwindwaves 15y ago
  The difference in car insurance from vancouver to victoria is 50%. People drive more expensive cars in vancouver and apparently are more likely to have accidents.
  - nobody31415926 15y ago
    And nobody in Victoria drives at more than 30km/h !
- alsocasey 15y ago
  Hold the phone, motor vehicle insurance isn't mandatory in the US?

wmougayar 15y ago

This definitely sucks for Canada. The Telco's and the antiquated regulation that protects them are big gatekeepers to progress and innovation. How do we break out of this deadlock?

zmanji 15y ago
One has to fix the prime example of regulatory capture that is the CRTC. This can be achieved by either changing the current management or drafting more legislation.
- freejack 15y ago
  IIRC, there are only a few commissioners who don't come from Canada's media/telco industries. i.e. the commission is mostly populated by insiders from the industries that the CRTC purports to oversee and regulate. Fox, henhouse, etc. http://www.crtc.gc.ca/eng/about/commissioners.htm http://www.crtc.gc.ca/eng/about/commissioners.htm
  - zmanji 15y ago
    The question that I always have is, how can we find people who have the knowledge to regulate the telco industry but who have not worked in the telco industry in a large capacity before?
    - a3camero 15y ago
      Research in Motion employees, other electronics companies. How about just business people? People who've worked for foreign cell/telecom companies who want to move back to Canada. IT experts who've worked with the infrastructure. Lawyers in the industry who work for private law firms (biased, but less so probably). There are plenty of people who would be a better choice than someone who's worked for an incumbent player.

loceng 15y ago

It keeps competitors out. Many governments do this. Keeps jobs and profits local, for the most part.

noarchy 15y ago
For the most part, maybe. Tell that to the Bell customers who deal with Indian call centres when they need tech support. I know I did, years back (haven't dealt with Bell in a while).
- cheez 15y ago
  Heh, I know the guy who piloted that way back. He still gets royalties.

zmanji 15y ago

I've never understood why in many western industrialized countries telecommunications has not been regulated the same as sewage, roads, electricity, etc. It is a vital piece of infrastructure in the 21st century and it should be the responsibility of the government to manage such infrastructure.

snowwindwaves 15y ago
we used to have that, and while the service of providing roads, electricity, or sewerage hasn't changed much in the last 100 years, telecommunications certainly has. while networks might lend themselves to natural monopolies, government sponsored telecommunications monopolies couldn't keep up with the pace of innovation these days and as a result consumers would be left paying high rates for antiquated service.
- zmanji 15y ago
  Right now in Canada I am paying high rates for antiquated service. There is still long distance, I have to pay extra for voicemail + caller id, etc. I agree that government sponsored monopolies probably could not keep up with the pace of innovation. However in industries where natural monopolies occur, I think they are the better solution then private enterprise. In Canada, it used to be that receiving text messages was free. However, one of the three carriers decided to charge for incoming texts. Sure enough, in less than a year, the other two carriers followed and also charged for incoming texts. I have a strong feeling to say that sort of behavior would not occur if there was a government sponsored monopoly. The obvious solution is better regulation, but I don't think anyone has found a solution to regulatory capture yet so I'm not banking on anything there.
  - phillmv 15y ago
    Hang on. There are many aspects which the government should regulate (common carrier status for internet, anyone?) but I think that in this aspect our biggest problem is that the barrier for entry in the Canadian market is too high, and so it's exceedingly difficult to disrupt. Because there's such a lack of competition the big telcos get to basically collude with each other.

1010010101 15y ago

This is meant to be a legitimate question, not sarcasm: Are there any countries where telecom is not "rigged"? That is, places where an entrepreneur could enter the market and the incumbents by and large would play "fair"?

jbarham 15y ago

By way of comparison, I'm living in Melbourne, Australia, and pay $55/month for the Nexus S w/ unlimited calls within Australia (including to other mobile phones), unlimited texts (IIRC) and 500 MB of data. That's for a one-year plan w/ Vodafone, and I didn't pay anything up-front for the phone. Needless to say I'm looking forward to upgrading to the Galaxy Nexus soon. :) My wife has the the same phone and same plan for two years and pays $45/month. The Australian mobile phone market is very competitive, and it has a number of foreign players (e.g., Optus, Vodafone, Virgin). Australian fixed-line telecommunications are much less competitive due to the legacy stranglehold of the former government monopoly, Telstra. IMO Canadians are far too complacent about government sanctioned monopolies or oligopolies (e.g., car insurance in BC, alcohol sales are provincial government monopolies, dairy product quotas, wheat board monopoly) that means they pay more for less choice, supposedly for their own good, when in reality it just enriches an old-boys network of politically well-connected players and condemns the protected industries to being being unable to compete internationally. FWIW I'm Canadian.

maximilianburke 15y ago
BC insurance, from my experience, isn't really a problem. Most quotes I've received in markets where there is a free(r) market for insurance often are considerably higher than what BC drivers pay through ICBC, especially if the driver is under 25. Case in point, I renewed my auto insurance today with ICBC and paid $1470 for 12 months of insurance for a 2007 Mazda 3. The policy includes $2,000,000 liability, collision and comprehensive coverage with $300 deductibles, plus rental car coverage. In the last five years I was rear-ended at a stop light and my car was vandalized once. The equivalent quote from Geico was $2385 which only included $500,000 of liability insurance.
- phillmv 15y ago
  Public insurance has a leg up: because the risk pool is greater it can hedge the risks more efficiently.
- refurb 15y ago
  The reason you are paying lower rates is because the gov't has stepped in and ensured it. Well that and the gov't pays out insurance claims, so it can often limit the huge payouts. The problem is is that when you benefit one group (young drivers), you're usually making someone else pay the difference (lower risk drivers). There is no free lunch.

dhughes 15y ago

I have cell service with Bell Aliant (eastern Canada) and my data is horrible! My phone a Samsung Galaxy SII on Bell's HSPA+ network which from what I understand can be anywhere from 21Mbps to 42Mbps but my phone is only capable of a max of 21Mbps. I don't expect to get 21Mbps or even 15Mbps but most days it's 0.3 or 1Mbps maybe 5Mbps to 9Mbps on a good day. Outright lies or incompetence or both to say such a thing and not have anywhere near what they promise. Bell's excuse is the network is busy with other users but I test it at all hours of the day and each day and weekend but it's never consistent. They advertise "HSPA+ 21Mbps" but make excuse after excuse once you're a customer that you'll never ever see that. I complained to the CRTC Donna Shewfelt Client Services wrote back to me gave me a case number 'CRTC Case ID: 548491' but then "The telecommunications industry has established an independent consumer agency, the Commissioner for Complaints for Telecommunications Services (CCTS)" and "Given the concerns you have raised, we believe this complaint is more properly within the scope of the CCTS and have forwarded your complaint to them." That was September 22 of this year (2011) and not one reply since then from any of them.

napierzaza 15y ago

That is indeed Canada. Try and get DSL or cable internet here too. It's terrible. Bad service, bad price.

jackvalentine 15y ago
Can you give me some concrete examples of this? I have a lecturer at university who constantly harps on about "canada doing it right" with broadband access and I've always had the feeling that he has no idea what he's talking about. I'd love to go head-to-head with him next year over the topic. This guy: http://www.politicalscience.com.au/ http://www.politicalscience.com.au/ http://www.politicalscience.com.au/p/my-media.html http://www.politicalscience.com.au/p/my-media.html