Trudeau Minister Says Canada's Cellular Plans Are Too Expensive

(Bloomberg) -- Canada’s Liberal government is picking a fight with the country’s telecommunications giants.

Internet and cell services still aren’t available for many rural and low-income Canadians, and prices are higher than in other developed countries, Innovation Minister Navdeep Bains said in a speech at the Canadian Telecom Summit on Monday.

“Access isn’t the only challenge, the bigger barrier is price,” Bains said. “The digital divide is unacceptable.”

Bains’ comments are the strongest yet from Justin Trudeau’s Liberal government, which won power from the Conservatives in October 2015. Trudeau’s election initially brought a sigh of relief to the country’s telecommunications companies, which had for years battled the Conservatives’ attempts to force more competition by propping up smaller players.

Those attempts proved ineffective. Rogers Communications Inc., Telus Corp. and BCE Inc. still own more than 90 percent of the wireless market and dominate television and internet service across the country. Prices, especially for cell phone service, are generally higher than in Europe and the U.S. Carriers argue this is because Canada, with a small population spread over a massive area, demands larger and more expensive infrastructure investment to maintain network quality.

New Models

Bains ordered the country’s telecommunications regulator to review its recent decision that allows wireless network owners to refuse access for smaller companies that don’t have their own cell towers in a certain geographic area.

That decision effectively shuts down prospects for companies like Sugar Wireless, which mostly uses wi-fi service to connect its users and pays to roam on other networks when wi-fi isn’t available. It’s a model that’s been employed with success in the U.S. by firms such as Republic Wireless.

Representatives from Telus, Rogers and BCE didn’t immediately respond to a request for comment. Shares of the three firms fell less than 1 percent at 9:45 a.m. in Toronto.

To contact the reporter on this story: Gerrit De Vynck in Toronto at gdevynck@bloomberg.net.

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Chris Fournier, Molly Schuetz