For years, the country\u2019s three largest telecom companies threatened to cut spending on their domestic networks in response to federal government policies that put competition ahead of profits. <\/p>\n
This year, Bell parent BCE Inc. BCE-T<\/a>, Rogers Communications Inc. RCI-B-T<\/a> and Telus Corp. T-T<\/a> showed they\u2019re not bluffing. <\/p>\n At the same time Prime Minister Mark Carney pushes business leaders to boost investment in Canadian infrastructure, telecom chief executive officers are slashing spending on the country\u2019s digital backbone, its fibre and wireless services. <\/p>\n In simple terms, established operators are pushing back against a series of Canadian Radio-television and Telecommunications Commission decisions that gave newcomers access to incumbents\u2019 cellphone and internet networks at below-market prices.<\/p>\n Telus boosts head count but sheds Canadian jobs as it reduces staff in core business<\/a><\/p>\n Companies that benefitted from these policies include Quebecor Inc., which offers its Freedom Mobile cellphone service over Rogers\u2019 system, and Telus, which won access to its rivals\u2019 fibre in Eastern Canada. <\/p>\n In the regulated telecom sector, where executives seldom take shots at politicians, CEOs are firing live ammo. <\/p>\n When Rogers announced financial results in late April, CEO Tony Staffieri used an investor call to take direct aim at the CRTC. He explained telecom companies spend billions of dollars on technology in expectation of payoffs that stretch over decades.<\/p>\n \u201cWe need government policies that reward investment and maintain certainty, especially in a slow-growth environment,\u201d said Mr. Staffieri. \u201cThe government has introduced policies that do the opposite, and this means we need to adjust our spending.\u201d <\/p>\n Rogers spent $4-billion to improve its operations in 2024. The company cut its 2026 capital spending by more than 30 per cent, to between $2.5-billion and $2.7-billion. <\/p>\n Shortly after Mr. Staffieri took an axe to spending, analyst Maher Yaghi at Bank of Nova Scotia said: \u201cRogers\u2019 decision to slim down capex spend and focus on improving free cash flow production in the face of regulatory policy headwinds is exactly the right call.\u201d <\/p>\n Rogers\u2019 share price popped on the announcement. What\u2019s bad for the future of Canada\u2019s digital infrastructure is good for the company\u2019s profits and cash flow. <\/p>\n Bell and Telus are following the same game plan, cutting back on investments in domestic networks that serve the bulk of the population, while putting money into businesses with better prospects. <\/p>\n Three years ago, Bell cut back planned spending on legacy operations, including its domestic fibre-to-the-home network. Instead, the company investing in infrastructure for artificial intelligence data centres and acquiring U.S-based Ziply Fiber. <\/p>\n