Canadian telco stocks are trading below fair value: Analyst
The federal government is forcing Rogers Communications Inc. to grant BCE Inc. and Telus Corp. access to its cellular network in Toronto's subway by Oct. 3 if they don’t yet have their own systems up and running by then.
Industry Minister François-Philippe Champagne said at Toronto City Hall that the deadline is part of new spectrum licence conditions, designed to bring cellphone and data services to the entire subway network by the end of 2026.
The licence conditions that came into effect Monday require Rogers to provide immediate access to the infrastructure and share technical details. The conditions also establish that carriers have a collective responsibility to provide wireless services on the TTC, and that they're expected to work together to meet the deadlines.
"The message is simple. Enough is enough. That is the message that I'm sending to the telcos on behalf of millions of TTC riders who have been very, very patient," Champagne said, adding that the government could impose penalties or licence suspensions if the deadline isn't met.
Currently, only Rogers and Freedom Mobile customers have access to the network, though all riders have 911 access.
The minister has also set a Dec. 20 deadline for mobile carriers, including rivals Bell and Telus, to reach commercial agreements with Rogers about financial terms.
And while the Oct. 3 deadline covers only the existing network, Ottawa is requiring service be in place for all stations within six months of the commercial agreements being reached. Service will need to be in place for 80 per cent of tunnels within two years, and full system coverage by the end of 2026.
The deadlines come after months of tense back-and-forth negotiations between Rogers and rivals Bell and Telus on how to move forward. The companies have been deadlocked over the best technical approach, as well as financial terms, for providing coverage to all subway riders.
Bell and Telus both want a joint build of the subway's 5G network using a consortium model similar to Montreal's Metro system, rather than a pay-for-access approach. Rogers has not publicly committed to either model.
The roughly three-week timeline to bring some level of coverage for all riders comes after Rogers unexpectedly launched 5G wireless service for its own customers in Toronto's downtown subway stations and tunnels in August. The move came despite ongoing talks with the government and drew frustration from Bell and Telus.
All three telecoms said they welcomed the deadlines announced Monday that will force the others to the table.
“This approach reflects what we've been proposing all along — to bring 5G services to all riders as quickly as possible," Rogers spokeswoman Sarah Schmidt said in a statement.
"Bell and Telus have been dragging their heels and the federal government is now forcing them to work with us in earnest to make connectivity possible for all riders."
She added the company will continue to work to build out the TTC network to expand access and that it has shared engineering and technical information with Bell and Telus.
Telus spokesman Richard Gilhooley said the company was pleased with the decision to compel Rogers to provide access.
"Minister Champagne's order will significantly improve public safety and fair competition. It is regrettable that it took his action to force Rogers to do what they had promised to do months ago," he said in a statement.
Bell spokeswoman Jacqueline Michelis said it is a good day for Toronto as the news will mean greater connectivity, convenience and safety.
"With the federal government now forcing Rogers to finally work with other carriers, we look forward to providing our customers with underground wireless coverage in the coming weeks," she said in a statement.
While past negotiation efforts have yet to yield results, Champagne said he expects the companies to meet the Oct. 3 deadline.
"They know me by now. I'm not the type of guy you want to mess with. I think they figured that out," he said.
"But above that, they don't want to mess with millions of Torontonians."
It has been more than a decade since the TTC signed a deal to enable cell service in the subway, but the reluctance of the major wireless providers to sign on to the system owned by BAI Communications meant few had access.
Only after Rogers bought the Canadian arm of BAI Communications in April did the federal government have the jurisdiction to act on the issue, Champagne said.
"The message could not be stronger, and I expect them fully to comply with that. If they fail to do so, we will take enforcement action."