New CRTC Rules Aim To Lower Wireless Costs For Canadians

Canada’s broadcast regulator is taking steps to lower wireless costs.

Specifically, the Canadian Radio-television and Telecommunications Commission (CRTC) has issued new rules that force large telecom companies such as BCE and Rogers Communications to offer inexpensive plans and resell access to their networks to smaller industry players.

The decision by the CRTC makes it easier for regional providers such as Quebecor (TSX:QBR.A) and Cogeco Communications (TSX:CCA) to compete on wireless plans with the sector’s three dominant companies -- Rogers (TSX:RCI.B), BCE (TSX:BCE) and Telus (TSX:T).

Only companies that own spectrum in Canada will be eligible to participate in the "mobile virtual network operator" framework. It applies for seven years, according to a decision released by the CRTC.

Wireless competition continues to be a major debate in Canada after Rogers struck a deal to take over Shaw Communications (TSX:SJR.B) in March for $16 billion U.S. Shaw operates Freedom Mobile, the number four wireless provider in much Canada, including Toronto and Vancouver. Analysts have said that regulators are likely to force changes to the Rogers/Shaw deal.

The CRTC is also ordering the dominant telecom companies to sell lower-cost plans. By July of this year, Bell, Telus and Rogers will be expected to offer and promote monthly wireless plans for $35 that include three gigabytes of data and unlimited messaging within Canada. They must also offer cut-rate plans for people who do not use their phones often for $15 a month.

The new cost plans also apply to Saskatchewan Telecommunications, or SaskTel, a government-owned telecom company based in the western Canadian province.