What is an MVNO? List and Status in Canada

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Mandated Mobile Virtual Network Operator (MVNO) access

Previously, it had been up to the national carriers to individually negotiate and agree on wholesale rates with MVNOs – which they hadn’t been willing to do voluntarily or fairly.

What is an MVNO?

An MVNO is a mobile service provider that purchases access from existing mobile network operators (MNO) such as Bell, Rogers and Telus at regulated wholesale prices and sells that access in cell phone plans to consumers.

In the US, this approach has proven to provide more affordable plans through MVNOs such as Google Fi, Straight Talk and Ting.

A similar solution is already in place for internet services, where the CRTC regulates the rates at which telephone and cable companies must sell access to their networks to independent ISPs at wholesale prices. However, these regulated wholesale rates do not exist for phone services.

MVNO benefits

  • Increase competitive pressure on Big 3
  • Lower prices for consumers
  • Incentive to provide better service
  • Incentive to innovate

MVNO risks

  • Compromising investments in 5G technologies
  • Declining network quality due to reduced investments
  • Undermining growth of regional carriers like Videotron and Sasktel
  • Lower profits for Canadian network operators

Facilities-based vs wholesale MVNOs

Facilities-based MVNOs are regional service providers who own, operate and maintain their own network infrastructure and have invested in access to a portion of the wireless spectrum, but do not have wide or national coverage. They purchase bulk network access from network operators to extend their coverage outside of their owned and operated network. Examples include Videotron, Eastlink and Xplornet.

Wholesale MVNOs are non-facilities-based service providers that must rely on the physical infrastructure of a facilities-based network operator to provide phone services to their customers. They purchase network access in bulk and develop attractive plans and packages that they sell to customers. They do not own and operate their own slice of spectrum or cellular network infrastructure.

Timeline of regulatory actions regarding MVNOs

CRTC proposes wholesale access for all MVNOs on a temporary basis

In its comprehensive review of mobile wireless services, the CRTC stated that MVNOs should have mandatory access to wireless providers’ networks via regulated wholesale rates (as is done for internet prices) until they establish themselves in order to increase competition and lower prices.

Competition Bureau suggests access for facilities-based MVNOs on a temporary basis

In response to the CRTC, the Competition Bureau submitted an intervention providing their own findings, further comments, noting that regional carriers such as Videotron and Freedom have doubled their subscribers in the last 5 years and Canadians pay an average of 10% less per GB in areas where a regional provider has a 5.5% market share, which they estimate could increase to 65% savings if their market share grew to 20%.

However, introducing MVNOs could slow or disrupt this progress as they would be competing most directly with the regional providers who are already favoured by price-conscious consumers.

They propose implementing MVNOs on a temporary basis in specific regions to help regional providers expand into new markets. The Big 3 would be required to sell access to their networks for a limited time to enable the regional provider to offer competitive plans while they build out their own network infrastructure.

They believe that in the short term, this will provide price competition while in the long term, it will incentivize investment into additional national networks and provide competitive pressure.

Big 3 say MVNOs will have negative impacts

Unsurprisingly, the Big 3 oppose mandatory say they’ll significantly reduce investments if they’re forced to sell wholesale access to MVNO and that this could hurt Canada’s transition to 5G.

  • Telus said it would cut $1 billion in spending and 5,000 jobs
  • Bell’s annual capital spending would be “significantly less” than the $4 billion

The PwC report concluded that Canada’s GDP would be reduced by $10 billion over 5 years, tax revenue would drop $2.5 billion and 94,000 jobs would be lost if MVNO access was mandated.

April 2021 – CRTC chooses facilities-based MVNO over wholesale MVNO model

The decision requires the Big 3 to sell access to their wireless networks at regulated wholesale rates, but only to regional providers that have invested in their own network infrastructure and spectrum, only for a period of 7 years and rates must be negotiated between the parties (rather than being set by the CRTC) – a true half-measure decision. It also requires the Big 3 to implement seamless roaming.

This will enable, but not require existing regional providers such as Videotron and Xplornet to immediately start serving new areas and competing for customers there while incentivizing them to build out their physical networks – essentially a glorified roaming agreement.

The CRTC hopes this will be enough to convince a regional provider to expand across Canada and become a national player.

The decision cuts out existing and would-be smaller, independent MVNOs from entering the market without first buying wireless spectrum – a scarce and expensive resource.

This is odd considering how open wholesale access model has has some success in the internet services market – enabling independent wholesale ISPs to hold 7.2% of the market as of 2019 – up from 4.6% in 2013.


Clearly the end goal here is to get one of the regional carriers to expand nationally in that 7 year period. Freedom would have been the most likely candidate for this, but that won’t happen if Rogers is allowed to buy them. Eastlink, TBayTel, Sasktel, Iristel and Videotron are unlikely to start buying spectrum and setting up towers across the country. The best hope is if Freedom is forced to be removed from the Rogers-Shaw deal and that one of the regional carriers gets it (or some other company).

It’s also highly suspicious that this decision comes 10 days after the deadline for deposits on the next spectrum auction.

My take is that Rogers always knew they wouldn’t get to keep Freedom. They’re acquiring Shaw for the fibre backbone out west that they need for 5G anyhow. So they will be forced to let Freedom be divested to someone else.
My guess, Videotron. They’ve had nationwide ambitions since the AWS auction way back. They had spectrum across the country until selling it to Shaw somewhat recently. But this is their chance to get there.
Besides, the CRTC always makes seemingly policies that anyone can take advantage of, but are really targeted at one player.
The set asides were for WIND/Freedom. The mandate on wholesale roaming rates was too. This is for Videotron.

Seems absolutely ludicrous that CRTC decided this preemptively, before knowing a) the result of the pending 5G mid-band spectrum auction, and b) the result of the Competition Bureau and any Cabinet intervention in the Rogers/Shaw deal. The proper role of MVNO’s in the retail market should be decided after those are in place.

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Cansumer Staff

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