BUSINESS

Wind, Mobilicity, Public Mobile Defect From Industry Association

04/10/2013 07:26 EDT | Updated 06/10/2013 05:12 EDT
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Three of Canada's new wireless carriers say they will better serve their customers outside the industry's lobby group, which they accuse of favouring Rogers, Bell and Telus.

Wind Mobile, Public Mobile and Mobilicity say three-year contracts, roaming rates and tower sharing were among irritants that made them leave the Canadian Wireless Telecommunications Association.

The three small carriers accused the association of taking positions on these issues that favoured Canada's big three carriers.

"Instead of spinning our wheels internally, we will be able to focus the time and energy on helping Canadian consumers," Mobilicity's director of legal affairs, Gary Wong, said Wednesday.

Public Mobile, Wind Mobile and Mobilicity don't ask their customers to sign contracts for mobile phones and have brought more competition to the market since they launched about three years ago.

The three small companies are expected to have just over six per cent of the market at the end of this year, up from just under five per cent at the end of 2012, the Convergence Consulting Group has estimated.

Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) have most all the rest — more than 24 million wireless subscribers combined.

Wind Mobile's Simon Lockie said the CWTA's position backing three-year contracts favours Rogers, Bell and Telus, which subsidize expensive smartphones over the life of the contract.

"The CRTC heard loud and clear it's the No. 1 issue that Canadians hate," said Lockie, Wind's chief regulatory officer.

The association called the withdrawal unfortunate and rejected the allegations that it only works on behalf of its large members.

"CWTA has always and will continue to work on behalf of all of its members," spokesman Marc Choma said from Ottawa, adding that the association would welcome their return in the future.

Public Mobile paid between $50,000 and $100,000 in annual dues to the Canadian Wireless Telecommunications Association, said Bob Boron, senior vice-president and chief legal and regulatory officer.

Leaving the industry group won't have any negative impact on customers, Boron said.

"We feel like we are going to do a better job in lobbying and making positions known before decision-makers and policy-makers as a result of us exiting the association."

The Canadian Wireless Telecommunications Association is involved in initiatives such as a national cellphone recycling program, the upcoming stolen phone database, wireless AMBER alerts and improvements to the 911 emergency call system.

"Obviously we want everyone in Canada to have access to all of these initiatives," Choma said. "We have to look at if and how that can be accommodated."

Wind Mobile's Lockie said those are programs that the three smaller carriers will have to pursue on their own or participate in co-operation with the industry association but as non-members.

Telecom analyst Iain Grant said that Wind Mobile, Public Mobile and Mobilicity came to the conclusion that the industry lobby group wasn't meeting their needs and didn't want to pay to be a part of it anymore.

It's in consumers' interests that these new wireless companies survive, said Grant, managing director of the SeaBoard Group.

He noted that Mobilicity is "struggling with debt" and Wind Mobile is up for sale.

"Without the new entrants we're going to go back to the way it was in 2007 when Canada had the highest prices in the world."

Wind Mobile, Public Mobile and Mobilicity emerged after the Canadian government moved to increase competition in 2008 when it reserved some wireless spectrum for new entrants.

Ottawa is preparing to hold another auction of radio spectrum that will allow carriers to build faster networks to handle consumers increased use of data and cover more area.

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