Summary
There are good reasons why the Government and regulator in Canada want to introduce more effective competition into the country's mobile market. But Canadian incumbents, like all incumbents, are determined and innovative in finding arguments and ways and means to inhibit and delay entrants who may disturb their existing profitable arrangements.
Analysis
The behavior of and use of all means at their disposal by the trio of leading Canadian mobile operators (Rogers, Bell, and Telus) to inhibit entrants are not surprising. They are typical of incumbents everywhere from South Africa to Germany and Mexico to Malaysia. In the broad arena of the telecommunications sector these attitudes and actions show why it is inappropriate to leave critical decisions, such as traffic management in the context of debates about net neutrality, solely in the hands of incumbents when they can therefore unilaterally (i.e. with no checks and balances) affect the dynamics of competition and the conditions of service for customers. In the case of Canada concerns and complaints about the high prices and other aspects of the mobile services available to Canadians, particularly in comparison with the U.S., led to a policy decision to facilitate new entrants, through steps such as spectrum set asides and mandatory obligations to establish site sharing and roaming agreements. Predictably the incumbents produced claims and objections about the technical and operational difficulties associated with such arrangements, although at the same time they are busy establishing such forms of cooperation between themselves. The most recent decision by the regulator CRTC invalidating the Canadian "citizenship" of the Egyptian Orascom-backed Globalive (which won spectrum in the AWS auction of 2008 everywhere except Quebec) is the result of a challenge mounted by these incumbents, after Industry Canada had decided post-auction that Globalive did meet all conditions necessary to be awarded a license. Of course the generally difficult climate for investment has not helped the ability of Globalive to raise manifestly Canadian dollars to fund its launch, for which purpose it has been deploying its network infrastructure after signing contracts with Huawei, Nokia Siemens Networks, and Alcatel-Lucent. It has also been hiring staff for functions such as customer service in areas with high unemployment such as the Atlantic provinces. The next steps in this saga will involve continuing legal and political efforts, as well as maneuvering by Globalive to restructure its financing and governance arrangements to appear more "Canadian", and allow the intent of the Government's policy to introduce more competitors into the Canadian mobile market to be fulfilled. It would be very embarrassing for Industry Canada and the Government if this nationalistic ploy by the Canadian incumbents were ultimately successful. I wonder, not being a lawyer, if current Canadian rules about ownership of mobile operators could be challenged within the framework of the World Trade Organization (WTO). But it must not be forgotten that even if Globalive is eventually approved any significant delays in its commercial launch will inevitably work to the incumbents' benefit, as they are aggressively launching new more powerful mobile broadband networks (the HSPA networks of the two formerly only CDMA2000 major operators Bell and Telus and the HSPA+ upgrade of Rogers) and are able to lock more high end customers into 2 or even 3 year contracts. The dependence of entrants upon new and most likely lower ARPU customers will be reinforced, which will make it harder for them to be successful. Canadian geography and demographics ( a larger area than the U.S. with only about 11% of the population, concentrated close to the U.S. border) makes it very difficult under any circumstances to operate on a viable basis outside a handful of metropolitan areas, notably the Montreal-Ottawa-Toronto corridor and Vancouver
