Cellphone contracts may be a constant source of irritation for many Canadians, but the wireless industry is an important economic generator for Canada. According to the Canadian Wireless Telecommunications Association (CWTA), it provides 261,000 jobs and adds $43 billion annually to the country's economy.
The largest private-sector employer in B.C. is a telecom – Telus [TSX:T] – and the wireless side of its business accounted for about half of the company's $11.4 billion revenue in 2013.
But to keep pace with an insatiable appetite for more bandwidth and faster download speeds – driven by mobile devices and video streaming – Canadian telecoms will need to continue pouring billions into their networks.
Those networks are also important to the growing machine-to-machine space (M2M), which will provide new businesses opportunities for both the wireless industry and other high-tech ventures.
Former New Brunswick premier Bernard Lord, now CWTA president, was in Vancouver recently for Wavefront's M2M Summit. He spoke to Business in Vancouver about M2M and the challenges Canada's wireless industry faces from increasing federal government regulation.
Q: What are some of the challenges Canadian businesses face in keeping pace in the M2M space?
A: To meet all this demand, not only do we need spectrum, but we also need antenna sites. There was an exemption before of cell sites that were less than 15 metres. There was no need for consultation. Now [the federal government] has announced there has to be consultation for all sites. We've got to be careful that we don't let a minority of people that yell louder than those who use [the service] block the development that is beneficial for everyone.
Q: The Stephen Harper government has blocked Telus' attempts to buy Mobilicity, introduced a range of new restrictions on wireless companies and launched a negative ad campaign against the Big Three telecoms. What signal does this send to investors?
A: Ten years ago, wireless networks in Europe were probably better than they are here in Canada. It's not the case today. The latest report from Cisco shows that wireless speeds of our networks in Canada are about 75% faster than in Europe. What happened in Europe? Well, government got involved. They over-regulated, they interfered, they changed the rules – and investors stayed away.
Q: The Harper government wants a fourth national wireless carrier, based on the idea that the wireless business is too heavily concentrated in the hands of three carriers. Is the Canadian market big enough for a fourth national carrier?
A: Canada has the second most number of carriers in the world, other than the U.S., and we're one-tenth of the population. This idea that three players isn't a lot – you'd be hard-pressed to find a country with our population around the world that has more than three national players. That's a false debate. The Bank of America, around the world they looked at 27 jurisdictions. The largest provider on average in these countries has 42% of the marketplace. In Canada, the largest provider [Rogers] has 34% of the marketplace.
Q: If we dramatically increase the number of devices communicating over Wi-Fi or cellular networks, does this not open more back doors that could be used by hackers, our own government or foreign governments?
A: I think it could become a significant problem, that people will not want to participate in this if they feel that their information is being misused. Canadians do a lot of online banking and are willing to use mobile payments as long as they believe that the system is trustworthy, that the information is used for that purpose only. The government has an obligation to be very open and upfront with all citizens in Canada. Instead of spending millions of dollars in attacking an industry, I think it would be incumbent on the government to answer those questions. •
