Canada: New regulations for MVNO expansion

The CRTC (Canadian Radio-television Commission) has recently announced new rules affecting cellular networks known as Virtual Network Operators (MVNOs), with the goal of fostering greater competition in Canada’s wireless market.

In the following Guinea Mobile article, find out how the new regulations boost competition in Canada’s MVNO market.

Canada’s MVNO market

MVNOs are networks that do not own their own infrastructure, but resell wholesale access to existing networks to consumers at more affordable prices.

Companies such as Mint Mobile, owned by famous Canadian actor and entrepreneur Ryan Reynolds, are examples of MVNOs that offer competitively priced unlimited data, calling and texting plans within the U.S. for $30 per month.

The company has no cell towers or spectrum rights of its own, but simply buys “space” on other companies’ cellular networks and trades them.

In 2021, Canada’s telecommunications regulator established policies for MVNOs wishing to operate in the country, requiring them to have their own network somewhere in Canada within seven years in order to take advantage of existing networks in the country.

Specifically, they must already have their own spectrum license and plan to build a network in the region they want to leverage within seven years. If they can meet those conditions, they qualify, but the only companies that do are the existing ones.

“We are one step closer to implementing our policy that will allow regional providers to offer wireless services in areas where competition is limited,” CRTC Chairman Ian Scott said in a press release.”This will help provide more affordable options to millions of Canadians while increasing competition. We hope that the large providers will negotiate in good faith and reach an agreement as quickly as possible with regional wireless carriers,” Ian Scott said.

Consumer advocacy group OpenMedia says the regulator is doubling down on a policy that was a mistake in the first place.

“They’ve committed 100% to the facilities-based or physical infrastructure-based competition model, which simply hasn’t served Canada well,” said campaigns director Matt Hatfield. “We’ve been trying it for over a decade and it’s just not really happening.”

By 2022, the CRTC issued more rules for MVNOs, urging major incumbents to accept applications for access to their networks and to negotiate wholesale MVNO tariffs with regional wireless providers.

These negotiations will ensure that qualified MVNOs have access to 5G networks and ensure call quality as customers move between coverage areas.

While these new rules appear to open the door for MVNOs, there are criticisms and concerns that they may not be enough to drive real competition in the Canadian wireless market.

Anthony Calavera, co-founder of Wind Mobile in 2009, says it’s a major problem in Canada’s telecom landscape, which is why the customer service experience is so much worse and why networks are not as reliable in other OECD countries, period.” He doesn’t think MVNOs are the answer because good wireless networks require investment, but ultimately he thinks the problem is a distraction to the real issue anyway.

“If we really want lower prices, we have to fix it structurally,” he commented.

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A boost to competition

Under new CRTC regulations, regional competitors, including Bell Mobility, RCCI, TCI and Sasktel, are required to share their networks with MVNOs, especially in areas where they have significant market power.

These agreements are expected to come into effect soon, which will allow MVNOs to begin selling plans in new parts of Canada.

The rules also include roaming agreements for 5G networks, which are currently in the process of being rolled out. This will ensure that competition continues to grow as the MVNO market evolves towards 5G technology.

With these new regulations, the CRTC seeks to promote competition in the wireless market, provide more choice and affordable rates for wireless users and facilitate access to quality services across Canada.

Some consumer advocates and telecommunications experts believe that a deeper structural overhaul is needed to improve Canada’s telecommunications landscape and lower prices for consumers.

The recent regulations put in place by the CRTC mark a significant milestone in Canada’s cell phone market, with the goal of promoting competition and benefiting consumers.

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These measures are expected to not only increase competition, but also improve the quality of services and rates for wireless users across Canada.

Ultimately, the CRTC’s focus on diversity and accessibility in the wireless market promises tangible benefits for consumers and further evolution into the future of mobile communications in the country. Get in touch for personalized advice.