Thursday, September 20, 2007

Break Bell-Telus-Rogers wireless 'stranglehold,' Quebecor CEO urges Ottawa

TORONTO - The federal government must quickly end the "stranglehold" that Canada's three big wireless telecommunications operators have, says Pierre Karl Peladeau, the president and chief executive of Quebecor Inc. (TSX:QBR.B)

Peladeau continued his campaign to open it for new competition, including from a wireless services that Quebecor Media would like to launch, during a speech Thursday at the Empire Club in downtown Toronto..

He said Rogers Communications Inc. (TSX:RCI.B), BCE Inc. (TSX:BCE) and Telus Inc. (TSX:T) said "have a stranglehold on the market."

He called on the Industry department in Ottawa to quickly set the rules and date for its planned auction of radio frequency spectrum that will be used for mobile services.

Quebecor, which currently doesn't have its own wireless network, and Winnipeg-based MTS Allstream, which has only a regional wireless network in Manitoba, have been calling on the federal government to ensure some of the new spectrum licences go to new players.

The big three wireless networks, however, counter that all companies bidding on wireless spectrum should be treated equally - which many observers suggest would be an advantage to them since they already have their national networks in place.

Peladeau brought a weapon to his speech, the much sought-after Apple iPhone, which he brandished to the lunch-time audience at the elegant Royal York hotel.

"It's a small taste of the true potential of the wireless future, but - like you - I have not had a chance to actually use an iPhone," Peladeau said as he briefly waved around the shiny pocket-sized mobile entertainment device.

"Americans can pay about $60 a month to use the iPhone. In Canada, this same phone will likely cost between $260 to $879 a month."

Apple's phone is currently being offered only in the United States and only through one U.S. carrier. Rogers, which is the only Canadian carrier with a GPS network that's compatible with the iPhone, has said it's interested in the device but hasn't announced it will carry it.

Sales of the iPhone beat expectations when it first became available in the United State in late June. This week Apple Inc. announced that the phone would be unveiled in the U.K. and Germany in November, while France Telecom's Orange has said it will carry the product at the same time.

Peladeau accused the big three players of denying Canadians lower prices and more innovation, linking the development of the national wireless industry to "the monopoly on the old telephone."

"Canada once led the world in telecommunications services and with the right competitive environment we can do so again," he declared. "Better prices, better services, and better technology will give Canadian consumers a break and will allow our businesses to compete.

Peladeau said Quebecor Media - owner of Quebec cable-TV operator Videotron, the Sun Media newspaper group and French-language television network TVA and other media businesses - is ready to invest heavily in an advanced mobile network if it can be assured a level playing field against the established players.

But the chief executive stopped short of comfirming any intentions to make Quebecor a national competitor for wireless consumers.

"At this stage we don't have the capacity to allow our own judgement. We'll wait until the rules are known and Industry Canada releases what will be the process to the auction," he said in question session afterwards.

"From there we will advise."

Quebecor has more than enough money to enter the spectrum race without any government help suggested Michael Hennessy, vice-president of Telus' broadband and video policy.

"Nobody can stop him from being in the market today by buying up all the spectrum, he said.

He said the real issue is: why does Quebecor need government favours while at the same time asking to get rid of federal regulations.

On Wednesday, Quebecor announced that newspaper executive Michael Sifton would step into the role of president and CEO of Sun Media Corp., which Quebecor Media Inc. owns.

Peladeau wouldn't confirm whether the move could signal future layoffs at Sun Media, which has cut jobs in recent years.

"Mike is fully responsible of running Sun Media. At this stage there is no such plan because he is coming into the business. From there we'll see what's going to happen."