July 31 (Bloomberg) -- Canada’s telecommunications regulator banned what it called discriminatory roaming contracts among wireless carriers, saying they allowed bigger players to overcharge smaller ones.
The Canadian Radio-television and Telecommunications Commission said in a statement it found “clear instances of unjust discrimination” by Rogers Communications Inc., the country’s largest mobile operator. The Ottawa-based regulator said it will prohibit “exclusivity provisions in roaming agreements” between wireless service providers.
Canada has tried for more than half a decade to stoke competition in the sector. The government introduced policies such as setting aside wireless spectrum for bidding by new firms to encourage a fourth provider to compete nationally against the three dominant players -- Rogers, BCE Inc. and Telus Corp.
“The exclusivity clauses with some new entrants were put in place four or five years ago,” Rogers spokeswoman Jennifer Kett said in an e-mail. “Every signatory had a choice. They could sign a long term or a short term agreement or a deal with an exclusivity clause. Some carriers chose to sign exclusive agreements because they got a discounted rate.”
Today’s CRTC’s move, which allows smaller carriers to sign roaming agreements with more than one carrier instead of having to rely on a single network owner, isn’t material to Rogers’ stock or the rest of the sector, Drew McReynolds, an analyst in Toronto with RBC Capital Markets, said in a client note.
Rogers dropped 30 cents, or 0.7 percent, to C$42.58 at 4 p.m. in Toronto, in line with the 0.8 percent drop in the S&P/TSX Composite Telecom Services Sector Index and compared with the 1.3 percent loss in the broad S&P/TSX.
A bigger decision will come by the end of February when the CRTC rules on whether it will limit prices large carriers can charge smaller ones for space on their networks.
There’s an “urgent need for fair and competitive federally regulated roaming policy,” Pierre Dion, Quebecor Inc. Chief Executive Officer said today in a conference call. The issue needs to be resolved before Quebecor considers expanding nationally from its base in Quebec, fulfilling the Canadian government’s goal of more competitive wireless markets.
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