A regional wireless carrier with a 3G network across the territories is trying to go national – and it’s getting pushback from some of Canada’s big three telecommunications companies.
In January, Ice Wireless launched Sugar Mobile, a startup offering a $19-a-month wireless service to customers across Canada.
The service uses a combination of Wi-Fi and data networks to allow customers to make phone calls and send text messages over the Internet, kind of like using Skype.
“It’s not a traditional cellular service,” said Samer Bishay, president and CEO of Sugar Mobile and Ice Wireless. “It’s all data. You’re able to make all your voice phone calls, all your SMS messages and obviously surf the Internet through that connection.”
To use Sugar Mobile, customers first have to unlock their phones and download an app. Then, when they’re in a WiFi hotspot – which Bishay said is 80 per cent of the time for most people – they can make unlimited calls and send unlimited texts to anyone in Canada and the U.S.
They’re also given 200 megabytes of data for any time they don’t have WiFi. Bishay said that’s enough for 650 minutes of voice chat or about 20,000 text messages.
Bishay said $19 a month is far less than Canadians can expect to pay for a traditional phone plan with data from any of the major carriers – Bell, Telus or Rogers.
“The price point to actually get on a data plan in Canada right now is at least at $40 to start,” he said, “which is a high price to pay considering that you’re going to only want the data when you’re outside of that (Wi-Fi) zone, right? And you’re only outside of that zone for 20 per cent of the time.”
But it’s Sugar Mobile’s creative way of finding customers across Canada that has now attracted the ire of Rogers and Bell.
Ice Wireless operates in the Yukon, Northwest Territories and Nunavut. But it has a reciprocal roaming agreement with Rogers, so that customers in the North can still use their phones when they’re in southern Canada.
And that’s the key. Sugar Mobile customers are given SIM cards assigned to 867 area codes. So a customer living in Toronto will piggyback off the roaming agreement, and will simply appear to Rogers as an Ice Wireless customer roaming in southern Canada.
Bishay said he doesn’t think the design is sneaky.
“We’re just trying to innovate and push the envelope, and benefit the consumer at the end of the day. … That’s really what it comes down to,” he said.
He said Sugar Mobile already has thousands of customers across Canada, including some in the Yukon.
But Rogers, unsurprisingly, is not pleased with the arrangement. In February, the company sent a notice to Ice Wireless, saying it would disconnect Ice Wireless and Sugar Mobile from its mobile network.
In return, Ice Wireless filed a complaint with the Canadian Radio-television and Telecommunications Commission. Now, the CRTC has until March 17 to decide whether Sugar Mobile should be allowed to keep operating.
Josh Tabish, campaigns director at Vancouver-based non-profit advocacy group OpenMedia, said the real question here is whether a regional provider should be allowed to go national.
“Companies that have been forced to build out their own cellphone infrastructure fail,” he said, referring to WIND Mobile and Mobilicity, upstart providers that were eventually bought out by Shaw and Rogers. “The bar for building a national cellphone network when three already exist is simply too high.”
He said the only way for regional companies to compete with the Big Three is by doing something new, like Sugar Mobile has done.
“We need innovation in whatever form it looks like,” he said. “This type of thing should be encouraged, not discouraged.”
Sugar Mobile is partly the product of a CRTC ruling from 2015. In the ruling, the CRTC said that companies without their own wireless infrastructure can negotiate access with a single carrier and then take advantage of all the roaming agreements that carrier has with other operators.
Bishay said Sugar Mobile qualifies as one of those companies. It has an agreement with Ice Wireless, and is therefore entitled to use the Rogers network, he argued.
He also said that Sugar Mobile customers are only roaming a small fraction of the time, since they’re mostly using WiFi connections.
“Why doesn’t Rogers do the same thing instead of fighting us?” he said. “Why don’t they launch their own … product and compete?”
But Rogers says Sugar Mobile is violating its roaming agreement with Ice Wireless.
“These customers are clearly not roaming and have no right to use Rogers,” the company said in a submission to the CRTC on Feb. 18.
Bell has also waded into the fray, saying that Sugar Mobile is allowing its customers to spend “all of their air time permanently roaming on the network of the roaming provider rather than on the home network of their service provider.”
But Tabish said he thinks Rogers is just trying to kill any competition.
“We think that if the commission has any sense, they will see this for what it is, which is a blatantly anti-competitive move,” he said.
He said companies like Sugar Mobile already exist in the United States, but the Big Three have made it very difficult for similar companies to thrive in Canada.
On Saturday, OpenMedia launched a petition to support Sugar Mobile, which has already collected over 25,000 signatures.
The organization plans to make a submission to the CRTC before the March 17 deadline.
“What we want to be able to say is Canadians want more choice, they want lower wireless bills, they think these types of innovative services are important,” he said. “This should be a Canadian success story.”
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