Smaller telecoms hope for big win when CRTC releases landmark decision on MVNOs

·3 min read

TORONTO — TextNow of Waterloo, Ont., is one of the smaller, little-known telecom companies that will be affected by a big CRTC regulatory decision that's to be released Thursday afternoon.

Founded in 2009 by two University of Waterloo students, TextNow has an advertising-supported app that provides users with a 10-digit phone number and unlimited calling and texting for free — but it's of limited use in Canada.

In the United States, on the other hand, it operates as an MVNO —mobile virtual network operator — that works with T-Mobile, one of the big, national network operators.

"It's been a very mutually beneficial relationship between us and T-Mobile. We would like to bring a similar model in Canada and we feel this will make phone service accessible to people that really, really need it," TextNow co-founder Derek Ting said in a phone call from San Francisco.

In Canada, however, TextNow's app has only worked with Wi-Fi — when a smartphone is connected to the internet through a home wireless network or other network in localized areas such as shops, hotels, libraries and other public places.

A CRTC decision being announced after stock markets close could force Rogers, Bell and Telus to sell access to their wireless networks at prices that MVNOs can afford.

So far, the Big Three have been staunch opponents of MVNOs — which they portray as businesses that want the benefits of a national network without paying enough of the cost of building and maintaining expensive infrastructure

"Yeah we have approached the Big Three," Ting said just prior to the publication of CRTC's decision.

"We haven't really gotten to a point yet where they're (saying) OK. That makes sense. . . . Let's do something together..It's been just a lot of conversations but not much has been happening."

During CRTC hearings held in February 2020, many public interest groups and smaller wireless companies told the regulator it should be less expensive for emerging operators to connect to the three national wireless networks on a wholesale basis.

The Big Three wireless companies argued, on the other hand, that wholesale rates should be high enough to justify their past and future investments in mobile networks.

The telecom regulator, led by CRTC chair Ian Scott, is scheduled to release the decision as Toronto's stock market closes at 4 p.m. ET.

Matt Stein, who is chairman of one of the business groups that participated in the CRTC's research and consultation, said the Big Three have previously dug in and fought for years against other regulatory decisions that they oppose.

"So with that in mind. I'm optimistic that the CRTC will take the right steps today," Stein said just hours before the decision was to be released.

"But I'm also concerned and watching as I know Canadians are. And also hopeful that this will be the time that the incumbents accept that the competition is good for Canadians and so they need to accept it, too."

The decision follows months of research and input, including nine days of public hearings.

This report by The Canadian Press was first published April 15, 2021.

Companies in this story: (TSX:RCI.B, TSX:BCE, TSX:T, TSX:QBR.B, TSX:SJR.B)

David Paddon, The Canadian Press