Can the Canadian mobile market resist MVNOs any longer?

MVNOs are needed to give customers more choice on service, product and price.

Guest author

April 21, 2021

3 Min Read
Can the Canadian mobile market resist MVNOs any longer? periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece James Gray, Managing Director, Graystone Strategy shares his further thoughts in the Canadian MVNO market.

Recently I put the finishing touches to a blog looking at the competitive landscape in the Canadian mobile market, one that’s dominated by the Big 3 – Rogers, Telus and Bell.

In particular, it looked at why it was so important for the consumer that CRTC – Canada’s regulator – had finally reversed its long-held resistance to any regulator intervention and granted a new MVNO to join the fray.

It coincided with the news that Rogers Communications has acquired Shaw Communications for around $26billion. Serious money to back up very serious intent. Investors must be rubbing their hands.

However, for consumers it’s not so clear cut and begs the question, can the regulator approve such a deal when choice is significantly eroded?

Indeed, it underlines the points I made in my original blog that MVNOs are needed to give customers more choice on service, product and price.

In Europe, these type of deals have triggered regulatory intervention. Closer to home in the UK, the Three and O2 deal was disallowed. Even a similar proposed deal between O2 and Virgin is being highly scrutinised in the context of a competitive and MVNO open market.

Further afield, some European market mergers have triggered insistence from the regulator that new MVNO licences are granted and specific models are adopted. For example, when O2 and Three merged in Ireland, the regulator and competition authorities only approved the merger if two new MVNO licences were issued.

Furthermore, they insisted on “Full  MVNOs” whilst mandating that the wholesale deal must be a capacity based agreement, where the MVNO gets access to a percentage of the host operator’s total capacity. These two “regulatory remedies” ensured that MVNOs had more control over their propositions and costs, encouraging rapid growth and greater competition.

With this backdrop, you can see why there are renewed calls for similar to happen in Canada, where campaigners want to see a full MVNO to give new entrants more control and prevent the Big 3 from exerting any influence over what the MVNO can technically do.

I completely see why. My experience of working at an MVNO that has been involved in such a challenge tells me that when you open up the market, investors and consumers do well. There’s more innovation in product, improvements to service and more investment in coverage, especially in rural areas.

Surely to ensure these outcomes for the Canadian consumer, and given the CRTC’s opinions on the existing market power of the Big 3, it’s time to look to other markets and consider similar or potentially more aggressive remedial action?

I fear failure to do anything will erode trust in the process, and trust that the consumers’ rights are promoted and protected. One to watch that’s for sure.


To find out more about the Canadian market at the upcoming MVNOs North America Digital Symposium, you can register your place here.

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