Fresh Takes

Unnecessary interventions to lower wireless prices

Canadian telecommunications companies invest billions of dollars every year to expand and modernize their networks. Setting up 5G infrastructure over the next few years alone is expected to cost $26 billion. These investments are threatened, however, by increasing intervention on the part of the federal government and the CRTC to force a reduction in the prices of wireless services.

As columnist John Ivison reminds us in the National Post, prices have already dropped considerably in the past few years, especially with the recent introduction of plans with unlimited data. Today we have access to ever faster services at prices that only covered basic services not so long ago.

The MEI has explained in several recent publications the negative consequences of a policy that forces large providers to share their infrastructure with virtual operators at regulated prices. These virtual operators do not invest in the networks at all and only resell the service. This type of competition is entirely artificial and does nothing to contribute to the long-term dynamism of the industry.

Such a policy necessarily makes investments less profitable and consequently reduces the incentives for large providers to invest. John Ivison rightly concludes that the government and the CRTC should let the free market work instead of endangering billions of dollars of investment in a sector that is so critical to our economy.

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