Anthony Lacavera - How We Can Win: And What Happens to Us and Our Country If We Dont

I n 2007, I set out to build a new telecommunications company in Canada. Nine years later, I sold WIND Mobile for $1.6 billion. Most peopleespecially our investors, who got back six times what theyd put into the companyconsidered it a successful exit. I made a lot of money too. But to me WIND was, in some key respects, a failure. I didnt start a company just to make a profit. Like most entrepreneurs, I also wanted to make a difference.

Many Canadians are deeply skeptical about business, viewing it as a less than noble calling. But the entrepreneurs I know are pretty idealistic. They want to make the world, or at least their corner of it, a better place. Thats why astronomically successful entrepreneurs, men and women who are millionaires many times over, volunteer their time at incubators and accelerators, mentoring the next generation and funding start-ups. Upstarts with quirky, niche businesses also truly believe theyre changing the world. The 22-year-olds who build a new gaming platform or create an app for construction site managers arent engaged in a cynical exercise to rip people off so they can laze around all day playing beer pong; theyre passionate about gaming or construction, fanatical even, and sincerely believe theyre making other peoples lives better.

My own lofty goal was to shake up the telecommunications market so that all Canadians, regardless of which carrier they used (though of course I hoped theyd choose WIND), got better service for a lot less money. When I started WIND, three major carriers controlled telecommunications in this country; they had some of the lowest customer satisfaction rates yet some of the highest fees on the planet. I used to go bananas when I got my cellphone bill. The cost was usually way higher than whatever plan Id signed on for, due to all the hidden charges and confusing overagesand exponentially higher than what Americans were paying.

It was obvious to me that a challenger would be able to disrupt the market in ways that would be good for consumers, good for the industry as a whole and, ultimately, good for the country. Even way back in 2007, when the ability to send and receive e-mails on a mobile device still seemed borderline miraculous, it was clear that wireless was going to be as important to the twenty-first-century economy as the railway had been in the nineteenth centuryand it was equally clear that Canada was not ready. Because our country is so big and our population density so low, we faced network construction challenges that smaller countries such as South Korea and Singapore, both global leaders in connectivity, did not. Our telecommunications infrastructure was fragmented; outside major urban centres like Vancouver and Montreal, connectivity wasnt great and it was also relatively slow. However, no one was rushing to upgrade Canadas infrastructure. When an oligopoly controls an industryand in Bell, Telus and Rogers, we have an oligopolytheres little pressure to innovate. Why bother, when building better networks costs a fortune and reduces shareholders dividends? Whats the hurry, when customers have nowhere else to go?

A little competition would change everything, I thought. A fourth, lower-cost carrier would force the incumbents to slash prices. I was right about that, temporarily, anyway. When WIND began operating, prices dropped across the board. And when we announced that we wouldnt charge a system access feean absurd, made-up charge that didnt relate to the provision of any actual servicesBell, Telus and Rogers, and their wholly owned subsidiaries Fido, Solo, Koodo, Virgin Mobile and the rest, stopped charging that fee too.

But I also thought that having more players in the wireless market would revitalize the telecommunications landscape in ways that would kick-start the creation of new businesses and help make Canada more competitive, and there I was wrong. The Canadian telecommunications infrastructure is still subpar and access to it is still overpriced, and thats not just bad for people who like to stream movies on their phones. Its bad for businesses that rely on the Internetwhich is pretty much every business these days, though the impact on high-tech companies is most severeand therefore, ultimately, really bad for our economy. A crucial part of the infrastructure for the knowledge economy, something that needs to be the equivalent of a beautifully paved six-lane highway, is still, in a lot of parts of the country, more like a dirt road. Nor did WIND usher in an attitudinal shift, emboldening entrepreneurs to dream big and try to build businesses capable of disrupting the oligopolies that dominate so many sectors of our economy, from banking to energy. Unwittingly, we may have done the reverse, providing a cautionary tale about the futility of trying to challenge the status quo in Canada.

Why didnt the advent of a fourth carrier have a bigger impact? The simplest explanation is that WIND was not, in the end, a strong-enough challenger to break the oligopolys stranglehold on telecommunications and force fundamental change. I wasnt a perfect CEO and I definitely made mistakes, but the biggest one was underestimating the barriers to competition in Canada, not just in telecommunications but in almost every sector of our economy. Some of these barriers are cultural, historical and intangible, while others are structural, regulatory and glaringly obvious. Some are the product of the way our capital markets function, others are related to the way our government operates. Some spring from the power of oligopolies and the way our business elites interact to protect the status quo; others can be traced back to our education system and how we learn to think about our own prospects and capabilities. But the net effect is the same: if we cant compete, with each other and with the rest of the world, theres a ceiling on growth in Canada.