Advocates for small players say the pace of acquisitions has accelerated over the past two years as a result of policies and rates set by Canada’s telecom regulator
“We are living through an independent service provider mass extinction event that we have been warning the CRTC and politicians about for years,” said Geoff White, the executive director of the Competitive Network Operators of Canada , in a statement. The industry association represents independent internet service providers .
“For years now, smaller competitors have been hamstrung by inflated wholesale access rates and lack of access to incumbent fibre. Under those conditions, it is no surprise that service-based competitors would be bought up,” Mr. White said.Some ISPs have suggested the acquisitions could be part of an opportunistic strategy to erase competition while they are struggling.
Yet the big companies say these acquisitions are part of their strategies to expand their services outside their home territories, allowing them to compete with local incumbents and offer more affordable services through subbrands, known in the industry as “flankers.” Bell Canada said it was invited to participate in the EBOX and Distributel sale processes and decided to invest in order to strengthen its presence in Quebec and Ontario and offer services at the same or lower prices. The companies will “benefit from Bell’s technology and network investments and operational synergies,” said Bell spokesperson Jacqueline Michelis.
Independent wholesalers typically lease network space from several incumbents. With acquisitions, incumbents could take advantage of mutual agreements to negotiate access rates that are even lower than those the wholesalers offered.
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