Fighting with Bell isn’t about competition. It’s about control |

Ted Rogers wants to “take any opportunity to apologise to other competitors” for relying on BCE to deliver wireless services to his own customers, writes Robert MacMillan

In one of the scuttled deals of the hockey fan era, Bell Canada, is trying to buy out Rogers Communications, arguably Canada’s largest, most successful company. And many of the owners of non-BCE companies would like to complain about the much larger company in question.

Many households and local operators would prefer to be bought by Telus (a relatively small company, with a decent network), or Shaw Communications (the big networks, and the assumption it knows what it’s doing with them), because they’d be able to stay a big company and buy the telecom networks owned by Rogers.

They can complain about Rogers, Bell or Shaw, if they wish, but they should keep trying to put more focus on the much larger and more complex picture, especially for people without a choice.

Ted Rogers, who ran his media company with his two sons, was interested in making sure his customers could easily get the widest choice of services — or as many as he could spend the company’s resources. He wanted to take any opportunity to apologize to other competitors for relying on Bell to deliver wireless services to his own customers.

What Rogers Communications needs is about as much complexity as possible. If his wireless company needs to cover its community by 2km and 3km, it should be able to. If it needs to get the signal a few hundred feet farther, it should be able to do so. Every time it does one thing, someone else does another.

The same holds true for wholesale networks like Toronto’s digital network, where Shaw runs a very fast fibre optic system.

Rogers and Shaw compete not only against each other, but also against Telus and Rogers and Bell, which have a wide range of telecom networks of their own. If Telus and Shaw are able to expand their fibre networks, BCE can do something similar.

As subscribers try out whatever network a wireless operator has to offer, they try out various services. Their choice, depending on service quality, happens to be something different from what Rogers, Bell and Telus currently offer. Each of the networks adds to the diversity of your wireless services and makes it more flexible. It can affect whether you end up with a phone you enjoy, or a phone you use more, or a bundle of different services.

Most of the people who don’t like the idea of wireless companies “enjoying” their customers will simply stop buying their own services.

Rogers and Bell will make more money if this happens, as customers of all the other companies continue to purchase more expensive products and services because they can get a better deal. Bell alone has an extensive portfolio of postpaid telecommunication services for its television customers and Internet customers that it will have to compete against through just wireless networks.

Neither Shaw nor Telus is connected to the Canadian mobile broadcast spectrum auction that is about to happen. The wireless spectrum could open up a lot of opportunity for incumbents, but it’s not at all clear what the current carriers would want to do with this spectrum. If they want to develop next-generation networks, the spectrum would be a great opportunity for their efforts. So it’s very likely that they will try to see if they can’t get a better deal with Rogers and Bell than they could through Shaw.

If they do, Rogers and Bell will simply have to offer them the same amounts of spectrum they would receive from the auction — or free spectrum, for that matter.

The rest of the competitive forces don’t even exist. The existing players may use their huge reach to pick up new customers, but in terms of offering a choice of products and services, they only overlap with the existing business plans of Rogers and Bell.

So the motion to protest the planned BCE-Rogers merger will probably not succeed in an idealistic world, where the existing (mostly Toronto-based) media and telecom companies had much stronger sense of their own competitive interests. In fact, incumbents are often quite more concerned with figuring out what they can do to make their next generation network products successful.

Time will tell whether Telus can convince a succession of rural customers to move to its network. Rogers and Bell will spend a lot of money and a lot of time figuring out how to make their current networks more attractive to customers. And Shaw and Telus will use their vast supply chains to see what they can do to create new competition for Rogers.

The time will soon tell what the bigger business decisions of Bell

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