One-on-one with new BCE CEO Mirko Bibic: Part 1
The newly-minted chief executive officer of BCE Inc. says a race of cheap wireless rates in Canada would be bad for investment in the country.
“If our objective is to have the cheapest communications services in the world, or the G20, or the G8, I think that would be really bad public policy,” Mirko Bibic told BNN Bloomberg’s Amanda Lang during an interview Monday from Montreal on his first day in the new role.
“We’re on the cusp here of a new era in communications, which is really going to power the Canadian economy writ large. So what you want is the highest quality networks if we want to be a productive economy, you want the most coverage possible across the country, you want to connect communities, and, of course, you want affordable services and value for dollar paid.”
Bibic, who succeeds George Cope, previously served as a partner at Stikeman Elliott LLP. He joined BCE in March 2004 and was promoted to chief operating officer by October 2018. BCE announced in June Bibic would be taking over for Cope upon his retirement this month.
Bibic’s comments on wireless rates comes as pressure builds among Canada’s largest telecommunications companies – Bell, Rogers, Telus – to offer more competitive wireless packages.
Canada’s major telecom companies faced additional pressure last year after the Canadian Radio-television and Telecommunications Commission (CRTC) lowered wholesale broadband prices that major telcos can charge smaller internet providers, a decision BCE and other companies are appealing.
“We really have to step back and pause before we make decisions like [the one the CRTC made],” Bibic said. “We have a choice. These decisions always lead us to a fork in the road: Do we want to encourage investment, competition, and affordable prices? Or, on the other hand, are we just going to have a race for cheapness?”
“If the race is for cheapness, then we’re going to discourage investment and that’s going to have an impact on investment in Canada, whether it’s in our industry or other industries.”
Bibic added that the CRTC’s decision, which BCE said would have a $100 million cost impact, is an example of the impact government or regulatory decisions can have.
“If done right, they can actually propel investment and lead us on a path towards more productivity. Or if done wrong, it can have a massive negative impact on investment.”
Bibic also cited a recent decision from The Supreme Court of Canada (SCC) that quashed the CRTC’s controversial rule on Super Bowl ads.
The regulator’s selective ban on so-called simultaneous substitution, which was finalized in 2016, allowed Canadians to see American Super Bowl ads if they tuned into a U.S. broadcaster’s showing of the game. The SCC determined the regulator’s rule – which Bibic said was “probably the worst decision from the CRTC” in the time he’s been in the industry – was based on an “incorrect interpretation” of its authority.
“We did lose three years of revenues for CTV,” Bibic said of the CRTC’s decision. “Local television in Canada is not in a position where it can afford regulatory decisions where it takes millions of dollars of revenue out of the system. So that’s nice that that’s been reversed.”
Bibic noted that wireless rates are on the decline, citing a recent CRTC report.
Still, he said making lower rates the main objective will ultimately hinder service.
“If you race for the bottom of price, you’re not going to get quality and you’re not going to get coverage.”
BNN Bloomberg is a division of Bell Media, which is owned by BCE.