Connecting Canadians: Ensuring universal access to wireless services

The market for wireless services in Canada is characterized by the presence of significant market power of the three national service providers: Bell, Rogers and Telus. This reduces consumer welfare through reduced access to high quality wireless services in underserved areas. I conduct an empirical analysis to find that reduced mobility of subscribers, as illustrated by the low churn rate, contributes to greater profit margins, and thus market power. Using this and information gathered from expert interviews, I identify low subscriber mobility, and unutilized spectrum owing to the existing regulatory framework as factors contributing to welfare loss. I recommend that ISED create Tier 5 service areas for spectrum licenses immediately. I also recommend that ISED create a secondary market for unused spectrum once the Tier 5 service areas are fully implemented. Together these policy recommendations will ensure universal access to wireless services for all Canadians and increase welfare.