Friday, September 21, 2007

Quebecor chief takes aim at Big 3 cellular networks

Sep 21, 2007 04:30 AM
Chris Sorensen
Business Reporter

The war of words between the country's three big cellphone companies and would-be competitors continued yesterday as Quebecor Inc. CEO Pierre Karl Péladeau accused the industry's incumbents of stifling competition and innovation in the key wireless sector.

Péladeau, who is hoping to convince Ottawa to set aside wireless spectrum for new competitors in an upcoming federal auction, accused the industry's three major players – Rogers Communications Inc., BCE Inc. and Telus Corp. – of maintaining a "stranglehold" on wireless competition and customers' wallets.

"This stranglehold on competition leads us not only to higher prices," said Péladeau, who spoke at a luncheon in Toronto hosted by the Empire Club. "It leads to less services and less innovation. Where Canada once led the world in wireless, we now lag behind."

Montreal-based Quebecor is hoping to add a wireless network to its publishing, printing and cable TV businesses, saying it believes the future of all media is in wireless applications. Péladeau says the firm intends to build a network, possibly even on a national basis, if it is successful in securing the necessary spectrum at an upcoming auction.

Industry Minister Jim Prentice said earlier this week that the government will move ahead with its spectrum auction, but did not say what the rules for the process would be.

Quebecor and other potential wireless competitors, such as MTS Allstream Inc., want spectrum to be put aside for new entrants, arguing an open auction would allow the deep-pocketed incumbent carriers to pay vast amounts for spectrum to block others from entering the market.

Executives from all three of the incumbents were present at yesterday's event and were quick to take issue with Péladeau's comments.

"No matter how they try to slice it, they want subsidies from the federal government and their competitors to get into the business," said Ken Engelhart, vice-president of regulatory affairs for Rogers, the country's largest wireless operator.

While Engelhart acknowledged Rogers did not pay up-front for spectrum when it started in the business two decades ago, he also noted that the cable company lost "billions and billions" trying to develop what has only recently become a profitable industry. "And now they're coming along when the market is finally profitable ... and saying, `We should get subsidies to help us get into this business'?"

Wade Oosterman, president of Bell Mobility, said the company isn't opposed to more competition as long as there is a "level playing field."

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