No room for low-cost MVNO smartphone plan providers in Canada

Daily Brew
A man looks at his cellphone, which, if he is Canadian, doesn't have access to MVNO service. (Thinkstock)

Looking for an affordable, yet comprehensive, smartphone plan in Canada can be quite the exercise in futility. A look at the packages offered by the major Canadian wireless providers, namely Rogers, Bell and Telus, basic plans with a few hundred megabytes of data and 100-200 minutes start at an average cost of $50. Compare that to the plans our neighbours down south have access to and it's no wonder Canadians continue to push for cheaper plans, innovative alternatives and, ultimately, more competition.

Therein lies the problem: Canadians don't have options.

In the United States, consumers have the choice between brand names like Verizon, AT&T, Sprint and T-Mobile but can also opt for a no-contract route with a smaller Mobile Virtual Network Operator (MVNO) that provides a cheaper alternative without sacrificing call and data quality. Because MVNOs don't have or can't afford their own cell towers, they piggyback off established infrastructure from the big boys. So what's stopping companies from developing an equivalent like that in Canada? Josh Tabish, Campaigns Manager at OpenMedia.ca, has an answer that isn't all that surprising.

In Canada, the big three don't want that wholesale money. They want control.
—Josh Tabish, Campaigns Manager OpenMedia.ca

"The reason MVNOs can't make it in Canada is that big three are actively blocking them from using their networks," Tabish wrote in an email exchange with Yahoo Canada.

MVNOs can sustain themselves in America because the established carriers not only allow the use of their network, they welcome it. In Canada, the opposite is taking place.

"In the U.S., providers like Sprint are happy to sell wholesale services to companies like Ting, recognizing that they can make money on the retail and wholesale market. In Canada, the big three don't want that wholesale money. They want control. They're happy to throw away all the money they could be making on wholesale so they can dominate our market," he wrote.

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MVNOs allow for more flexibility

Three of the most notable MVNOs (including one that actually originated in Canada) offer plans that may surprise Canadians who are used to paying more for less:

Ting. This pay-what-you-use model lets you customize a plan to suit your needs. Only use 100 minutes a month? That'll be $3. Need between 500MB and 1GB of data? That'll cost you $19. Don't text much? One hundred text messages will cost you $3. All in, you're looking at $31 after a $6 single device fee. Founded originally in Toronto, it's disappointing that Ting wasn't able to establish itself Canada.

Project Fi. Currently an invite-only service, Google's Project Fi offers unlimited talk and text for $20 and 1GB data for $10 per month. Need more data? Each additional GB costs $10. Much like Ting, Project Fi piggybacks on different networks allowing users to have the strongest signal at all times. What's different about Project Fi, though, is Google will reimburse you for any unused data. If you pay for 2GB of data and only use 1GB, you'll get $10 reimbursed on your bill. The only setback, aside from needing an invite, is the service will only work on the Nexus 6.

Republic Wireless. If you’ve looked into Ting and Project Fi, chances are good you’ve heard the name Republic Wireless, too. The company offers plans starting at $5 and go up to $40 for unlimited talk and text over Wi-Fi and cell and unlimited 4G data. The one big downside, however, is that the $5 plan only gives you unlimited talk, text and data over Wi-Fi. If you don't have a hotspot signal, unfortunately, your phone won't work. Most users would likely opt for the $40 plan, which allows for network talk and data, and is still much cheaper than what's available even by other U.S. competitors.

CRTC giving hope for the future

Though Canada is currently lagging behind in terms of wireless innovation, a recent CRTC ruling states wireless roaming fees will be capped so smaller carriers can piggyback on existing networks without incurring large fees. While this is a win for smaller networks like Wind Mobile, a press release featured on OpenMedia.ca mentions more could have been done for the Canadian consumer in terms of MVNOs.

"While many Canadians were hoping the CRTC would go further, today they have taken significant steps toward ensuring that all Canadians can have a more affordable choice outside the big three. Other countries with four or more major providers have seen significant wireless savings - savings we hope Canadians will have access to soon."

Follow Brian on Twitter: @wordswithchin