Foreign Ownership of Canadian Telecoms

Transcription

1 Foreign Ownership of Canadian Telecoms Business Panel Divided on Whether to Loosen Regulations; Increased Competition Would Improve Prices and Options; Intense Panel Opposition to Ownership Stakes from Foreign Governments and Companies Operating from Overseas Dictatorship COMPAS Inc. Public Opinion and Customer Research

2 1.0 Overview The COMPAS business panel of CEOs and business leaders is divided about the loosening of regulations limiting foreign ownership stakes in Canadian telecom. A near consensus believes that increased competition would improve prices and options. Along with enthusiasm about the benefits of competition is intense panel opposition to ownership stakes from foreign governments and companies operating from overseas dictatorship These are the key findings from this past week s Internet survey of CEOs and business leaders on the COMPAS panel. The weekly business survey is undertaken for Canadian Business magazine under sponsorship of BDO Dunwoody LLP. 2.0 Details Table 2a displays evidence of a division of opinion about whether to loosen ownership restrictions. Table 2b shows that support for competition emerges from an expectation that prices and services options would improve. Table 2c shows widespread concern about the risk of industrial or military spying where the foreign supplier is owned by a foreign dictatorship or other organization with a doubtful history of respect for the law or where the foreign company operates from a dictatorship. 2

3 Table 2a: (Q1) There s been talk of the federal government s ending foreign ownership restrictions on telecom companies in Canada. Foreign ownership is limited to 46.7 per cent through combined direct and indirect ownership. In your view, should the federal government % Keep current restrictions 47 Remove all restrictions on foreign ownership except keep a provision if the national interest were in jeopardy 36 Increase restrictions on foreign ownership 7 Remove all restrictions 4 Don t Know 5 Table 2b: (Q2-5) On a 7 point scale where 7 means strongly agree, and 1 strongly disagree, how much do you agree with each of the following arguments? Increased competition in the Canadian telecom market would benefit consumers by improving Mean DNK Prices Service options Service quality Cell phone coverage

4 Table 2c:(Q6) Given the actual telecom players in the world today, one concern is the risk of industrial or military spying where the foreign supplier is owned by a foreign dictatorship or other organization with a doubtful history of respect for the law or where the foreign company operates from a dictatorship? Should Canada % Prohibit such companies from having any stake in a telecom provider in Canada 44 Allow only a weak minority stake 26 Allow full ownership but ensure that Canadian governments and companies with sensitive interests have other telecom options 20 Ignore the issue 6 Don t Know 4 The following verbatim comments provide a nuanced sense of respondent opinion: These are in many respects natural monopolies. They operate under a regulatory regime not an open entry/exit commercial situation. Allowing foreign control of a utility-type organization puts service levels and investment at risk. Telecommunications is a critical component of Canada's infrastructure and we would be foolish to just throw the door open and let anyone in. Status Quo works for me, newcomers tend to disrupt and then disappear!! Our rates are much too high. More competition is needed. Foreign ownership of such things as our Natural Resources or critical infrastructure such as telecommunications is a 'double-edged sword'. However on balance, the Canadian Government should not allow more than 49 % Foreign 4

5 Ownership, direct or indirect, in the key areas of our economy and security. Foreign ownership might be good for the big cities in Canada - but NOT for the rural areas. Foreign ownership should be avoided and national standards set. Advertisers should be made to pay a fee to the national government to avoid waste. Canada should only accept investments in Canadian cellular providers from companies whose home countries provide equal access and treatment to RIM for its Blackberry service. An issue that I'd like governments to tackle is usurious roaming charges when using cell phones and data outside of Canada. 3.0 Methodology The COMPAS web-survey of CEOs and leaders of small, medium, and large corporations was conducted October 20-22, Respondents constitute an essentially hand-picked panel with a higher numerical representation of small and medium-sized firms. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of n=94 are deemed accurate to within approximately 10.2 percentage points 19 times out of 20. The principal investigator on this study is Conrad Winn, Ph.D. 5