Crown wireless company looking more appealing

21 Oct

up-a-creek-without-a-paddleHow screwed is the federal government’s quest to improve the wireless market in Canada? You could say we’re at the cigarette-smoking stage, as in that’s what the country’s cellphone incumbents are figuratively doing right about now.

Act One saw the tease by Verizon, which thought about coming into Canada via a purchase of Wind and/or Mobilicity but ultimately decided against it. Perhaps the U.S. giant was too distracted by its mega-deal with Britain’s Vodafone, maybe it figured that Canada wasn’t a worthwhile enough market, or more likely it saw that it would still have huge disadvantages in facing off against Bell, Rogers and Telus. Either way, that hope sputtered.

Act Two focused on the alternative to Verizon, which would have seen a stronger and revitalized Wind purchased and run by its original backer, Egyptian billionaire Naguib Sawiris. But then the government went and vetoed his deal to buy business services provider Allstream from Manitoba Telecom, which would have done much to overcome some of those disadvantages facing Verizon or any other challenger, on unexplained national security grounds. And boy did that make Sawiris hopping mad. As he told an Egyptian news organization last week, he is “finished with Canada” and won’t spend another penny here. As if to add an exclamation mark to the whole thing, private equity firm Birch Hill – which was also a possible buyer for Wind and/or Mobilicity – also last week withdrew its intention to participate in the upcoming wireless spectrum auction.

Which brings us to Act Three, where the stage setting is grim indeed. The two small wireless providers, which the government has credited with lowering prices by almost 20 per cent since their inception a few years ago, have no obvious buyers – or at least those who have the money needed to compete with the incumbents – and the government has made it clear that they can’t sell out to the self-same Big Three. Moreover, with the Allstream rejection, the Conservatives have likely scared away any other potential buyers. After all, who would enter a market where the rules are clearly being made up on the fly?

Wind and Mobilicity are about as far up the creek as could be imagined, and where these already financially strapped companies are going to get the big money needed to acquire spectrum in January is anyone’s guess at this point. No one in their right mind is going to buy them.

Of course, someone who isn’t in their right mind might, and that sure sounds like the sort of people who are running this show (into the ground). Indeed, the only remaining realistic buyer for these two companies looks to be the government of Canada. I’d mentioned the possibility of a Crown wireless corporation before, an idea that was seconded by the Communications, Energy and Paperworkers Union, but the idea was laughed off by Industry Minister James Moore.

But given that the alternative is the likely death of Wind and/or Mobilicity, is there really any choice left?

Come on, think about it – it wouldn’t be so bad. Wind could even be rebranded to be more Canadian-sounding. Chinook Mobile, anyone?


Posted by on October 21, 2013 in government, telecommunications


6 responses to “Crown wireless company looking more appealing

  1. Marc Venot

    October 21, 2013 at 12:14 am

    If you intend to offer an opportunity for the aboriginals to enter this fray better to choose a name from one in Canada (Chinook is a “first nation” in Washington state).

  2. Ben Klass

    October 21, 2013 at 12:50 am

    It’s not like the government has a struggling crown corp with tons of retail space – oh wait a minute, they do: Canada Post.

  3. Ben Klass

    October 21, 2013 at 12:52 am

    Union issues aside, CP could be repurposed to become a 21st century communications provider – instead of relying on revenue from ads that junk up our physical mailboxes, they could be selling Canadians the means to receive texts, e-mail and online flyers at reasonable rates.

    The retail presence and sales force is there. I know there’s tons of red tape, but since we’re already thinking outside the box…

  4. Alexander Trauzzi (@Omega_)

    October 21, 2013 at 9:42 am

    More government intervention is definitely what we need and all we could possibly need in our telecom right now. We have so many problems with regard to telecom that have been perpetuated for the sake of over-billing consumers.

    The first problem is that we haven’t established a standard and scientific means of measuring the exchange of information (let alone value it). Instead, we’ve been relying on lobbyists and marketers to conjure up numbers and justify them after the fact of their greed.
    If you were buying produce and saw that all the scales were off & adding weight based on what you put on them, you’d only just be starting to get an idea of how bad we have it in Canadian telecom.

    Second, we have to admit that telecommunications services are essential. If not just for safety and daily life, then for our own benefit as a nation. Rolling together a national crown corporation would not only be prudent, but in perhaps less words: simple.

    All this crown corp would have to specialize in is the delivery of uninhibited TCP/IP connectivity for Canadians connected via land and cellular connections at a fraction of the cost currently being charged. And to be honest, with the public as the primary stakeholder, you’d be surprised what kinds of speeds we are entitled to when greed and marketing aren’t factors.

    Roll into every province, reclaim every last inch of publicly induced infrastructure and watch the prices drop.

  5. Serge

    October 21, 2013 at 1:54 pm

    Okay, but it can’t just be a Crown mobile company. It has to sell Cancon ringtones, too. And possibly tuques.

  6. Chris C.

    October 21, 2013 at 3:36 pm

    If they do it the way Canada Post has been handled, flee as fast as you can. Canada Post with its outrageous rates is the number one impediment to independent, small business in Canada.

    As a matter of fact, it’s high time we had a national debate on Canada Posts’s HORRENDOUS, GOUGING shipping rates.

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