Who is Robelus? It is the three-headed giant that rules Canadian telecommunications. More than ever. Without impunity. Rogers. Bell. Telus. One wonders who, in Ottawa, will really have the audacity to one day dismantle the incredible cerberus who defends this increasingly concentrated industry.
In another era in the United States, a country which is not exactly the very example of socialism or the command economy, there was no hesitation in smashing up the telecom giant that was AT&T. We still feel it today. There is, among our neighbors to the south, a real desire to make room for newcomers. The giants have realized that they can benefit from the presence of smaller suppliers who are also customers. Frienemies, both friends and rivals.
With us? The giant has three heads, but it still acts like a monopoly: it hates competition.
Who ?
Who can stand up to Robelus? Quebecor? Cogeco? Do they only have the means for this ambition? To become a national player in wireless, Quebecor and its subsidiary Videotron must dance to the rhythm of the smallest violin in the universe which, on the one hand, cries over the lack of competition in Canadian telecoms, and else, let these three Canadian giants buy out or crush all their rivals.
The person who plays the bow on this fiddle is somewhere in Ottawa. The CRTC has a new boss and we have to give her a chance, but her boss, the Minister of Innovation, Science and Economic Development, has been talking out of both sides of her mouth for several years now, as they say. west of the Ottawa River.
It promises increased competition and ever lower prices. But the price paid by Canadians continues to rise.
Entering this niche to disturb the established order borders on the impossible. Those who want to go must know how to dance. For Videotron, probably under its inexpensive Fizz brand, to make a name for itself in Western Canada, it will have to perform a series of bows and tricks dictated in advance and stretching over the next ten years.
Cogeco, for its part, is playing it safe. The ox is slow, as the saying goes, but the earth is patient. Cogeco, 10 times smaller on the stock market than Quebecor and 70 times smaller than Bell, cannot afford to act too abruptly.
The catch is, there’s no one else left. Bell quietly acquired the Quebec operator B2B2C last April. Ebox and Distributel were acquired before him. Analysts are speculating whether Cogeco is the next target of an acquisition attempt.
It’s political
This is not a political column. But if Pierre Poilievre were to wake up one morning and smell the proverbial coffee, he would immediately stop his crusade against the CBC and the Bank of Canada. It won’t get him anywhere. The big points to score against the Trudeau government are in telecommunications.
It’s not a technological question. The independent providers that for a while broke into internet services and for a spring even dreamed of taking off with 5G technology, haven’t all been crushed or swallowed up because they blamed a lack of technological expertise.
Nor is it a matter… of business. Of business, as we say at Air Canada. The suppliers who have lowered their flag for a year have been buying from the big suppliers and at quite correct prices this part of the national bandwidth which they borrow from them in order to resell it to their own customers.
It is greed. The CEO of Bell complained last month of government constraints on the deployment of its network. They prevent him from investing properly, he says. According to experts, the federal and provincial aid that invites it to connect remote areas to the Internet is so generous that it allows it to extend its infrastructure almost free of charge.
His income is increasing and his profit is not doing so badly. The reason: the average amount that Bell collects from its customers is constantly increasing. In wireless, there are eight quarters in a row of increases. Eight quarters. Two whole years of increase in the amount paid by consumers.
Industry Stories
The telecom industry is such that to take advantage of technology, you have to do business with device manufacturers on the one hand, and service providers on the other.
The rivalry on the device side is an all-Californian duopoly: Apple and Google share the pie. Samsung and others obviously have their share, but they depend on Google’s Android system. We have seen with Huawei, and before with BlackBerry, how its software dominates alongside the iPhone.
Apple and Google are accused of maintaining mobile monopolies in the United States and Europe. Not in Canada.
However, monopolies, we know that.