Lower Cell Phone Rates Coming to Canada? Government Opens Wireless Market up to Broader Competition

Potentially good news for BlackBerry users in Canada. It seems the feds (federal government) have decided to open up the Canadian market to broader competition against the will of the big players (Bell, Rogers, Telus). An auction of the "wireless spectrum" will occur next May, which should shakes things up and hopefully result in lower prices, better service and more choices for consumers. Details after the jump.

Lower Cell Phone Rates Coming to Canada? 

The federal government is opening up Canada’s wireless communications industry to more competition, a move that could lead to lower cellphone rates. A three-week auction of wireless spectrum — or capacity — to be held next May should foster competition between telecommunications companies and, ultimately, result in lower prices, better service and more choice for consumers, Industry Minister Jim Prentice said yesterday at a news conference in Toronto.

In the auction, about 105 megahertz of new spectrum will be made available for bidders, with 40 megahertz of that set aside for newcomers to the industry. Foreign companies will not be able to make independent bids on spectrum, but may do so in partnership with a Canadian firm.

"A more competitive wireless market is in the best interests of all Canadians," Prentice said. "The amount of spectrum takes into account the need for new entry in all regions of Canada while considering the interests of incumbent operators and their current spectrum holding."

To be eligible to compete for bandwidth set aside for new players, companies must currently hold less than 10 per cent of the national wireless market based on revenue. The telecom market is currently dominated by its three biggest players, Rogers Communications, Bell Mobility and Telus. Industry watchers say increased competition could help pull down cellphone rates in Canada, which are significantly higher than in either the United States or Europe.

Potential new carriers have also asked the government to mandate "reasonable" roaming arrangements and cellphone tower sharing practices in order to give them time to establish their own networks.

At least two companies — Quebecor Inc. of Montreal and Winnipeg-based MTS Allstream Inc. — have expressed interest in bidding on the spectrum auction.

The auction has been opposed by Bell, Rogers and Telus as giving new entrants special privileges and an unfair competitive advantage.

[ CP via MetroNews ]