Clearest way to drive down prices is to open markets to foreign competition: Ian Lee on the CRTC
TORONTO - Independent telecom provider TekSavvy Solutions Inc. has shelved plans to add wireless services and may exit some internet markets as a result of Thursday's CRTC decision on wholesale internet rates.
But TekSavvy vice-president Andy Kaplan-Myrth says it's too soon to determine whether it will also raise prices.
“The fact is it takes some time to figure out what the impact is going to be on our rate,” Kaplan-Myrth said in an interview Friday.
The CRTC on Thursday reversed a 2019 decision that lowered the rates smaller providers like TekSavvy pay to piggyback on the networks of larger cable and phone companies. Now, the higher rates set in 2016 will apply.
Kaplan-Myrth estimated it will take a month or more for TekSavvy to decide what to do about the prices it charges customers following the ruling.
The company and other independent ISPs - often called internet resellers by the phone and cable companies that sell them internet capacity - held about 10 per cent of the total market a few years ago.
They had anticipated the 2019 ruling would be upheld and that they would get money back from what they paid for network access since 2016.
Kaplan-Myrth said the CRTC changed some rate structures in a way that will push up some of TekSavvy's wholesale costs.
TekSavvy may decide to raise prices to reflect those higher costs or put usage caps on some plans that provide unlimited data for a fixed monthly price, Kaplan-Myrth said.
“Maybe we take those out of the market all together if we decide that those prices are, you know, not competitive, and we focus on other prices that are more competitive.”
But Kaplan-Myrth said “there's no way” that TekSavvy will lower its prices, as it did after the 2019 decision - a move that it later reversed during the pandemic because its costs went up.
Instead, the company is reviewing potential expense cuts, including a retreat from some markets and less investment business growth.
TekSavvy had planned to use some of the rebated money to buy wireless spectrum that would eventually allow it to offer mobile phone service to its customers.
But the company, based in Chatham, Ont., no longer has the confidence to bid in the wireless spectrum auction that begins in June.