Three recent entrants into the Canadian wireless landscape went up for sale last week, a move that could force consumers to spend more money for fewer choices, an industry watcher says.
Media reported last week that the three small companies — Wind Mobile, Public Mobile and Mobilicity — have been put on the auction block just a few years after the federal government launched a strategy to increase competition in the industry.
Rita Trichur, telecommunications reporter for The Globe and Mail’s Report on Business, says that the three companies, which launched between 2009 and 2010, faced "tremendous challenges" trying to gain market share in Canada.
"They’re up against three entrenched players who have been in the business for much longer," Trichur said, referring to Canada’s "big three" wireless carriers Rogers, Bell and Telus.
"They have a head start that’s been decades in the making," she told Matt Galloway on CBC Radio’s The Current.
The introduction of Wind Mobile, Public Mobile and Mobilicity was a result of a government initiative designed to spur competition and increase accessibility in the wireless industry. In 2007, Industry Minister Jim Prentice announced rules that forced existing carriers to share their networks with newcomers.
The government’s plan did ultimately benefit Canadian consumers, Trichur said. Since the new players entered the market, prices for wireless service fell by 10 per cent.
But now that the companies are poised to either be swallowed up by incumbents or merge into one entity, the gains consumers have made over the past few years could soon be undone.
"Either way prices will go up for consumers," Trichur said.
To hear more about how Canada’s telecommunication sector will be affected, listen to the full interview here.