Moore Says Canada Open to More Telecom Foreign Ownership

Canada is open to further lifting restrictions on foreign ownership of telecom companies as the government seeks to increase wireless competition, Industry Minister James Moore said.

“With regard to foreign ownership, we have liberalized in the past, it’s certainly something I know people are calling for, and it’s not something that we’re ruling out,” Moore said in a telephone interview today from Vancouver.

Last year, the government relaxed the rules to allow foreign companies to own telephone companies having less than 10 percent market share by revenue.

Canada is seeking to boost competition in the country’s mobile-phone industry by removing obstacles for new entrants. The government is limiting the amount of wireless spectrum dominant providers such as BCE Inc. (BCE) and Rogers Communications Inc. (RCI/B) can acquire in a January auction. It also said in June it would block any transfers of airwaves that diminish competition.

Moore said today the government will cap the rates wireless providers charge each other when their customers access external networks, a process called roaming.

“We’re essentially saying the status quo can’t continue, that the gap that exists between wholesale and retail wireless rates is something that hurts consumers by hurting competition,” he said in the interview.

Legislation Coming

The government will introduce changes to the Telecommunications Act “in the coming weeks” to prevent companies from levying roaming rates higher than those they charge their own customers for voice, data and text services, according to a statement by Industry Canada.

The nation’s telecom regulator said this month it will review whether the roaming rates being charged by large wireless providers are giving them an unfair advantage.

The government will also give Industry Canada and the Canadian Radio-television and Telecommunications Commission the power to fine companies that violate policies such as the code of conduct for wireless providers.

The changes will help Wind Mobile, one of the nation’s newer carriers, expand its wireless network and compete with the so-called incumbents, said chief executive officer, Anthony Lacavera. Wind is backed by Amsterdam-based VimpelCom Ltd.

“We’ve long maintained the incumbents have had a ridiculous head start and advantage over new entrants,” Lacavera said in a telephone interview today. “It sets a level playing field for national coverage for us.”

Roaming Agreements

Roaming agreements between carriers in Canada “are based on negotiated, mutually agreed upon rates,” Patricia Trott, a Rogers spokeswoman, said in an e-mail. Without more details, the company can’t say what affect the changes may have on consumers or phone companies, Trott said.

BCE will wait to see the proposed rules, Jason Laszlo, a company spokesman, said in an e-mail. “We look forward to seeing more detail in the legislation,” he said.

Shawn Hall, a spokesman for Telus, declined to comment on the government plans.

To contact the reporters on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net; Gerrit De Vynck in Toronto at gdevynck@bloomberg.net

To contact the editor responsible for this story: David Scanlan at dscanlan@bloomberg.net

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