Contrary to the global trend, the Internet will cost more in Canada in the coming months. The increase in wholesale rates caused by a recent CRTC decision does not discourage Quebec-based SME Oxio, which is banking on a model popular elsewhere in the world to expand.
Internet access plans will increase from $ 10 to $ 20 across Canada starting next month, the Duty independent suppliers who have to absorb a significant increase in wholesale prices.
At the end of May, the Canadian Radio-television and Telecommunications Commission (CRTC) overturned its previous ruling which imposed reduced rates on companies that own their own infrastructure to access their bandwidth. The federal body allows these companies to revert to the higher prices dating from before 2019 so that they can continue to invest in their networks.
The CRTC is going the wrong way, says Marc-André Campagna, CEO and co-founder of Oxio, based on what he has seen in recent years in several other countries. This decision is made to the detriment of regional or even virtual suppliers and their many customers. Above all, he says it is holding back innovation in an industry that needs it, he said.
Oxio is a Montreal-based self-service telecom service provider that has just raised $ 25 million to fund its expansion across Canada and even the United States. Since its creation in 2019, the SME of 60 employees has raised 40 million in all to deploy an automated and self-service solution, characterized by a web portal where its customers can manage the status of their services themselves. It is also a way of reducing its operating costs and offering competitive prices, despite the higher-than-expected cost of accessing the Videotron infrastructure, and soon Bell and Shaw. Like all other independent suppliers, Oxio is a reseller.
Its CEO, Marc-André Campagna, believes that there is a simple solution to get the Canadian telecoms sector out of the impasse it is currently in: as in many other markets around the world, including United States, infrastructure owners should focus on reselling to virtual operators who do business with the public.
It sounds simple, but it won’t happen on its own. Large Canadian providers have tried for at least two decades to avoid becoming simple infrastructure operators. The most recent decisions of the CRTC go in this direction, even if it is completely against the current world trend.
Oxio therefore intends to devote part of the money collected in its first major investment cycle in innovative services in order to prove to the CRTC that it would benefit from making more room for virtual and independent providers. “We talk a lot about the costs of current networks, but we don’t talk enough about the role that innovation can play in generating more investment. These services would be very positive for telecoms ”, says Mr. Campagna.
More importantly, they would allow large national companies to lessen the expected shock between their networks and those of foreign providers who plan to use satellite networks to provide Canada-wide access to the Internet very affordable.
We talk a lot about the costs of current networks, but we do not talk enough about the role that innovation can play in generating more investment. These services would be very positive for telecoms.
Oxio welcomes the arrival of these networks signed Amazon and SpaceX. Canadian company Telesat will also deploy similar technology. Oxio hopes to be able to extend its own service to their infrastructure as soon as possible, to serve areas of the continent where this way of accessing the Internet will be most efficient. “This is our vision of the future and it is also what we observe elsewhere in the world,” says Marc-André Campagna. In 5 to 10 years, the current large networks will not be what they are today, according to him. “Especially since they have proven that they are not the most innovative …”
Innovation by the little ones
In telecommunications, as elsewhere, innovation generally comes from the smallest companies. As long as you give them some room to breathe. This is exactly what the small Canadian Internet service providers want, united in the Canadian Competitive Network Operators (ORCC) organization.
ORCC has formally called on the federal government to reverse the recent CRTC decision on wholesale rates in order to remain competitive. As a result of this decision, the costs that its members must all pay to access the infrastructures of the major suppliers such as Bell, Rogers and Videotron could in many cases double.
The measures taken to absorb this cost increase vary from one supplier to another. Some have planned to cut their workforce or workspaces to reduce costs. Others will have to increase the price of packages offered to new customers who will migrate to their platform from next month. The anticipated increase could vary between $ 10 and $ 20 per month, depending on the nature and number of services to which customers are subscribed.
This increase goes against the promise of Liberal Party of Canada dating from the 2019 elections to lower the bill for these services by 25% by 2023.
Above all, it runs counter to the regular and general fall in the cost of telephony and Internet services observed on a global scale. While steadily declining elsewhere in the world, the average revenue generated per user – a benchmark scale in the telecoms industry – has increased in Canada over the past decade.