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Canadian telecoms regulator’s latest ruling spells ‘dark period’ for smaller operators

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Two recent decisions by Canada‘s telecom regulator are freezing out competition in the country’s highly concentrated industry, critics argue, making it even harder to bring down prices for mobile and internet service. For years, Canadian consumers have complained about high cellular bills, which rank among the steepest in the world, and Prime Minister Justin Trudeau’s Liberal government has threatened to take action if the providers failed to cut bills by 25%. On Thursday the Canadian Radio-television and Telecommunications Commission (CRTC) ruled that it would not significantly lower the rates that small companies must pay to access the high-speed broadband networks of larger rivals, including BCE Inc, Telus Corp and Rogers Communications Inc, known as the Big Three. That followed a CRTC ruling in April when it asked large telecoms firms to offer wholesale wireless access to so-called Mobile Virtual Network Operators (MVNOs), smaller outfits that can then resell the capacity at reduced retail prices and pass on the savings to consumers, but with several stipulations that were seen as wins for big companies. While the two decisions were intended to foster competition, critics say they will only marginalize the smaller players.

Thursday’s ruling will allow the big carriers to charge rates similar to the prices originally set in 2016 for wholesale access to their broadband networks. The decision overturns a 2019 ruling – which was still under appeal – that would have forced large telecom operators to lower their wholesale rates and make retroactive payments to small companies.

The Thursday ruling will result in much lower retroactive payments. TekSavvy, an internet service provider with around 300,000 subscribers across Canada, said it was petitioning the federal government directly to overrule the CRTC’s decision on broadband access rates, one of several avenues open to contest the ruling. It is also asking that CRTC Chair Ian Scott be removed from his role. Andy Kaplan-Myrth, a vice president at TekSavvy, told Reuters, “I never heard this scenario discussed seriously, and never really considered that they would do this.” He described the ruling as a “tombstone on the grave of telecom competition in Canada.” The Big Three operators control 89.2% of subscribers and 90.7% of revenue in Canada‘s telecom industry. Lawmakers and analysts have warned the concentration will only intensify if Rogers’ planned $16 billion acquisition of Shaw Communications Inc is allowed to proceed. FALLING SHORT TekSavvy said it would pull out of the upcoming 3500mHz spectrum auction in June, the frequency required for 5G rollout, and scrap plans to launch a mobile service, as a result of the broadband ruling. Critics also said measures to allow MVNOs fell short of what was needed to encourage robust competition. “The CRTC itself actively acknowledges just how concentrated the market is, and yet their decisions continue to not just uphold the status quo, but tip the scales even sweeter in big telecom’s favor,” Laura Tribe, executive director of OpenMedia, a community organization that advocates for affordable and accessible internet, said. Scott, the CRTC’s chair, in an interview with Reuters defended the latest decision, stating that “we make determinations that we believe are balanced and in the public interest.” Rogers and Telus did not respond to requests for comment on the Thursday decision. BCE said it was pleased with the ruling. Michael Geist, an internet law expert at the University of Ottawa, said the Trudeau government’s hands-off approach to the issue – passing decisions back to the CRTC, Innovation Minister Francois-Philippe Champagne declining to push for significant legislation – sent a signal to the market that the government would not be a strong voice for consumers. Champagne’s office did not immediately respond to a request for comment but his office previously said it was reviewing Thursday’s ruling. Geist called the current atmosphere “a dark period” for smaller companies. “But obviously it’s ‘happy days are here again’ for the Big Three,” he added.

(Reporting by Moira Warburton in TorontoEditing by Denny Thomas and Matthew Lewis)

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Britain in talks with 6 firms about building gigafactories for EV batteries

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Britain is in talks with six companies about building gigafactories to produce batteries for electric vehicles (EV), the Financial Times reported on Wednesday, citing people briefed on the discussions.

Car makers Ford Motor Co and Nissan Motor Co Ltd, conglomerates LG Corp and Samsung, and start-ups Britishvolt and InoBat Auto are in talks with the British government or local authorities about locations for potential factories and financial support, the report added .

 

(Reporting by Kanishka Singh in Bengaluru; Editing by Himani Sarkar)

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EBay to sell South Korean unit for about $3.6 billion to Shinsegae, Naver

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EBay will sell its South Korean business to retailer Shinsegae Group and e-commerce firm Naver for about 4 trillion won ($3.6 billion), local newspapers reported on Wednesday.

EBay Korea is the country’s third-largest e-commerce firm with market share of about 12.8% in 2020, according to Euromonitor. It operates the platforms Gmarket, Auction and G9.

Shinsegae, Naver and eBay Korea declined to comment.

Lotte Shopping had also been in the running, the Korea Economic Daily and other newspapers said, citing unnamed investment banking sources.

South Korea represents the world’s fourth largest e-commerce market. Driven by the coronavirus pandemic, e-commerce has soared to account for 35.8% of the retail market in 2020 compared with 28.6% in 2019, according to Euromonitor data.

Shinsegae and Naver formed a retail and e-commerce partnership in March by taking stakes worth 250 billion won in each other’s affiliates.

($1 = 1,117.7000 won)

 

(Reporting by Joyce Lee; Editing by Edwina Gibbs)

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Canada launches long-awaited auction of 5G spectrum

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Canada is set to begin a hotly anticipated auction of the mobile telecommunications bandwidth necessary for 5G rollout, one that was delayed more than a year by the pandemic.

The 3,500 MHz is a spectrum companies need to provide 5G, which requires more bandwidth to expand internet capabilities.The auction, initially scheduled for June 2020, is expected to take several weeks with Canadian government selling off 1,504 licenses in 172 service areas.

Smaller operators are going into the auction complaining that recent regulatory rulings have further tilted the scales in the favour of the country’s three biggest telecoms companies – BCE, Telus and Rogers Communications Inc – which together control around 90% of the market as a share of revenue.

Canadian mobile and internet consumers, meanwhile, have complained for years that their bills are among the world’s steepest. Prime Minister Justin Trudeau’s Liberal government has threatened to take action if the providers did not cut bills by 25%.

The last auction of the 600 MHz spectrum raised C$3.5 billion ($2.87 billion) for the government.

The companies have defended themselves, saying the prices they charge are falling.

Some 23 bidders including regional players such as Cogeco and Quebec’s Videotron are participating in the process. Shaw Communications did not apply to participate due to a $16 billion takeover bid from Rogers. Lawmakers and analysts have warned that market concentration will intensify if that acquisition proceeds.

In May, after Canada‘s telecoms regulator issued a ruling largely in favour of the big three on pricing for smaller companies’ access to broadband networks, internet service provider TekSavvy Inc withdrew from the auction, citing the decision.

Some experts say the government has been trying to level the playing field with its decision to set aside a proportion of spectrum in certain areas for smaller companies.

Gregory Taylor, a spectrum expert and associate professor at the University of Calgary, said he was pleased the government was auctioning off smaller geographic areas of coverage.

In previous auctions where the license covered whole provinces, “small providers could not participate because they could not hope to cover the range that was required in the license,” Taylor said.

Smaller geographic areas mean they have a better chance of fulfilling the requirements for the license, such as providing service to 90% of the population within five years of the issuance date.

The auction has no scheduled end date, although the federal ministry in charge of the spectrum auction has said winners would be announced within five days of bidding completion.

($1 = 1.2181 Canadian dollars)

 

(Reporting by Moira Warburton in Vancouver; Editing by David Gregorio)

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