Industry association stresses urgent need for more spectrum and removal of policy disincentives to continued investment

The Canadian Wireless Telecommunications Association (CWTA) has announced the release of “Wireless Communications: A Strong Signal for a Stronger Canada”, the wireless industry’s input to the Government of Canada’s Digital Economy Strategy consultation. As the Government embarks on this critical process to define and refine those policy elements that will shape Canada’s Digital Economy Strategy for the next five to seven years, CWTA has provided numerous recommendations that are essential in continuing to deliver a world-class wireless ecosystem that provides an increasingly important technological backbone for all aspects of life in Canada.

Growing Demands Need to be Met

Globally, mobile data traffic increased 160% between December 2008 and December 2009, and will double every year between 2010 and 2014. Canadian networks are far from immune to these pressures, given the exponential increase in Canadians’ adoption and usage of advanced wireless devices in the next few years.

“To avoid network traffic jams that would otherwise compromise the economic and social benefits inherent in advanced wireless broadband networks, wireless carriers will be under constant pressure to increase the already heady pace of capital and spectrum investments,” said CWTA President & CEO Bernard Lord. “As a critical element of its Digital Economy Strategy, the Government must act immediately to make available additional spectrum to help alleviate the impending network data crunch.”

Among its key recommendations, CWTA stresses the urgent need for the Government to act expeditiously and immediately commence the much-anticipated licensing processes for the 700 MHz and 2500 MHz spectrum. In relation to the 700 MHz licensing process, CWTA would clearly be concerned with any delays to the DTV transition and is encouraged by comments made by CRTC officials that the DTV transition date will not change. In addition, CWTA states that the Government must take all necessary steps to identify 500 MHz of additional spectrum that should be made available for commercial wireless services.

Ovum: Canadian Wireless Carriers Pay the Highest Spectrum License Fees in the G7

In another key recommendation, CWTA says it is imperative that the Government look for ways to reduce and remove policy and regulatory disincentives to network investment. Wireless carriers in Canada, and ultimately their customers, have to absorb disproportionately high regulatory costs. These costs act as a drag on the amount of capital available for required network investment and innovation.

A new report by Ovum Consulting confirms that Canadian wireless carriers pay some of the highest Government spectrum licence fees in the world – by far the highest in the G7, and second only to Australia in the developed world. The complete Ovum international comparison of spectrum licence fees is available at: http://www.cwta.ca/CWTASite/english/pdf/Ovum_SpectrumFees.pdf

In 2010, Canadian carriers will pay nearly $130 million in spectrum licence fees. If the 2009 US fee model were applied in Canada, the industry would pay less than $4 million in licence fees. In this regard, CWTA notes that the recent “Plan for a Digital Canada”, issued by the Senate Committee on Transport and Communications, recommends that “Industry Canada, in establishing policies to allocate and price spectrum, consider pricing regimes in other countries, especially those in the United States.”

“Excessive and arbitrary fees, levies and other regulatory charges will only serve to redirect funding that could otherwise be spent on further network investment,” said Mr. Lord. “Canadian consumers already absorb some of the highest Government spectrum licence fees in the world. And these fees are on top of the hundreds of millions of dollars that wireless carriers expect to pay in other regulatory fees and charges between 2010 and 2012, and on top of the billions they will need to raise to participate in upcoming spectrum auctions over the next 12 to 24 months.”

Wireless Communications Make Canada Stronger

The wireless industry in Canada makes an undeniable contribution to the economy and social fabric of Canada. The industry delivers an economic benefit of some $39 billion annually, creates nearly 300,000 high-value jobs, and contributes numerous national social programs to enhance civic participation and public safety in communities across the country.

“The growth of the industry since its launch 25 years ago has prompted a communications revolution that impacts all Canadians,” said Mr. Lord. “In a country as vast as Canada, any technology that brings us closer makes us stronger. This has never been truer than today, when Canada boasts some of the most advanced wireless networks in the world, including more of the fastest HSPA+ networks than any other country in the G8.”