To The Pointwith Boris Bozic
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1 Comments Canadian Wireless Oligopoly: Lessons to Be Learned

Article written by Boris Bozic on the 06 Sep 2013 in Canada,Current Events

What I learned this week was that for some business entities a $19 billion market is just not worth the effort.  It’s been well documented that global wireless giant, Verizon, made a preliminary bid to purchase Wind (for an estimated $700 million).  Verizon was also kicking the tires of Mobilcity, and contemplating a takeover.  But alas, Verizon had a change of thought and announced this week that they are not considering entering the Canadian wireless space. I also learned that when the Canadian wireless oligopoly is threatened they don’t stand by idling and allow the chips to fall where they may.

Rogers Communication, BCE Inc. and Telus Corp went on a very impressive campaign to protect their piece of the pie; airways were saturated with ads by all three.  The theme of the ads ranged from job loss in Canada, to the ever popular saying mouthed by most 12 year olds, “it’s not fair”.  I spend a lot of time in the car and listen mostly to talk radio. I think every second ad on the radio was about the evil American wireless empire potentially coming to Canada, and changing the wireless landscape as we know it.  I was impressed how the wireless companies came together to fight off a potential business threat by trying to push every emotional hot button of Canadian wireless consumers.  They had no shame.  If it meant wrapping their issue in the Canadian flag, then so be it. The ads also produced humour.  Not sure if that was the intent but a few of the ads made me laugh out loud.  Like the one ad that suggested a recent survey showed that wireless customers in Canada would be willing to pay more in fees because of the great services provided by the big three wireless companies.   Ah, okay.  I’m not going to question of the integrity of their survey, and I’m sure a survey actually exists.  Like the survey I have, which indicates that 80% of Canadian mortgage consumers would be willing to pay a 50 bps interest rate premium from mono-lines because of the important role they play in the Canadian mortgage space.  Full disclosure, our survey respondents where myself, Kathy Gregory, Donald Zuill, Jill Paish and Jason Kay.  Sure, we all happen to work together at MERIX and Paradigm, but that in no way influenced our survey results.

Whatever the real reason was for Verizon’s decision not to enter this market place will never be truly known.  Maybe their $700 million dollar offer to Wind was nothing more than a trial ballot to see how their competitors, consumers and regulators would respond.  Verizon now has a clear picture of how the wireless oligopoly in Canada will respond if they decide in the future that entry into a $19 billion wireless marketplace is worth the effort.

There’s a lesson here for the mortgage industry as well.   BCE, Rogers and Telus are fierce competitors, but that didn’t stop them from putting their competitive nature aside to protect their pie.  Not just a slice but the entire pie. They took their fight directly to the Canadian wireless consumer, and for now, they won.  Now they can go back to divvying up their spoils.

Until next time,



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Christopher Molder @/sonofabroker Website Reply

Great post and musings Boris. I enjoyed the read and always appreciate your candid opinions of our industry…Bravo.

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