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TekSavvy Solutions Inc., a Canadian independent internet service provider (ISP) based in Chatham, Ontario, is reportedly seeking a new owner as part of a formal sale process. The company has hired bankers and is currently accepting bids from potential buyers. This move comes in the wake of a series of acquisitions of other independent ISPs by larger telecommunications companies.
Independent ISPs like TekSavvy rent space on established network providers' infrastructure at regulated rates and then offer their services to their own customers. However, due to a challenging regulatory environment, several independent ISPs have been acquired by larger telecoms in recent times.
TekSavvy is the last remaining major independent wholesale-based internet provider. Other companies in the same space have been purchased by larger competitors. For instance, BCE Inc. acquired Ebox and Distributel, Telus acquired Altima Telecom and Start.ca, and Quebecor Inc. acquired VMedia. These acquisitions have been attributed to regulatory policies set by Canada's telecom regulator, the Canadian Radio-television and Telecommunications Commission (CRTC).
The CRTC's decision to reverse an earlier ruling to reduce wholesale rates in 2021 resulted in higher costs for independent ISPs. The regulator is currently reevaluating its framework for wholesale internet access with the goal of increasing competition and lowering prices. Part of this review involves considering whether large telecoms should be mandated to provide access to their fiber-to-the-home networks, which offer faster internet speeds.
TekSavvy, in its submission to the CRTC, criticized the current framework and called for urgent regulatory changes to preserve remaining wholesale competition and restore confidence in the regulator's ability to ensure fair telecommunications pricing.
Despite these efforts, independent ISPs like TekSavvy have been losing market share to incumbent telecoms, with their market share dropping from 10% in 2019 to 6%. The competitive landscape in the ISP industry is complex, and factors such as network management and bundling services play a significant role in shaping the market.
TekSavvy has faced challenges in recent years, including customer attrition to larger competitors and the need to raise prices during the pandemic to mitigate losses. The company also abandoned plans to enter the wireless market in 2021 due to regulatory concerns.
Please note that this summary is based on the provided information and may not capture all nuances of the original text.