The real winners of Thursday’s CRTC decision? Telecom companies, observers say

Business

Some telecommunications analysts and consumer advocates say the country's regional wireless and internet carriers will benefit the most from a landmark regulatory ruling Thursday by the CRTC.

Canada's big three telecom companies are likely to be able to manage the new regulatory regime without losing too much market shares, analysts say.(Brent Lewin/Bloomberg)

Some telecommunications analysts and consumer advocates say the country's regional wireless and internet carriers will benefit the most from the CRTC's landmark ruling on Thursday, which opened the door to more wireless competition by allowing a small number of regional companies to piggyback on the networks of the established players.

Analyst reports say two of Canada's publicly traded, mid-sized regional telecommunications groups will likely have more room to grow, given the CRTC's new restrictions on BCE's Bell Canada, Rogers Communications Inc. and Telus Corp.

But analysts from RBC Capital Markets and Canaccord Genuity say the three big national wireless carriers will likely be able to manage the new CRTC rules.

"We view this decision as 'constructive-enough' and manageable for national operators while at the same time 'extending a helping hand' to existing regional wireless operators," RBC analyst Drew McReynolds wrote in an report for clients.

Patrick Horan, portfolio manager with Agilith Capital said, on the whole, the proposals were "well balanced" between the interests of big companies, smaller rivals, and consumers, but added "I don't think it changes much at the end of the day."

"This isn't really going to hurt the Big Three at all in terms of a market share standpoint," he told CBC News.

'Vast nothingburger'

Former telecom regulator Timothy Denton took it one step further, calling the new policy a "vast nothingburger" for consumers.

"It does not increase competition, it is a plan for those who already own spectrum to provide somewhat more competition in areas where they already hold spectrum," the former national commissioner of the CRTC said in an interview with CBC News.

"Very few people benefit from it … it is the square root of nothing," he said.

One of Canada's most outspoken consumer advocacy groups, OpenMedia, criticized the CRTC for putting too much emphasis on the regional carriers, doing too little to limit the market power of the Big Three and very little to help new entrants to the wireless markets.

Analysts took a more favourable view of the CRTC decision, noting that Quebecor's Videotron will have more options to strengthen its base in Quebec or buy assets in other provinces and that Cogeco Communications may be able to advance its strategic goal of adding wireless to its internet and cable TV networks in Ontario and Quebec.

Horan said that customers of small regional companies such as Videotron and Cogeco are indeed poised to benefit from the new regime, but ultimately they are a small slice of the market, and unlikely to grow dramatically.

Most observers, including the CRTC, say the future for Shaw Communications and its Freedom Mobile subsidiary in Ontario, Alberta and B.C. is more difficult to predict because of a proposed takeover by Rogers.

With files from the CBC's Meegan Read and Reid Southwick

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Credit belongs to : www.cbc.ca

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