Is Canada’s clubby wireless industry about to be turned on its ear? The market certainly seems to think so.

On December 17, shares of the country’s Big Three carriers—Rogers Communications (TSX: RCI.B, NYSE: RCI), BCE Inc. (TSX: BCE, NYSE: BCE) and Telus Corp. (TSX: T, NYSE: TU)—plunged on the Toronto exchange, to the tune of 5.7%, 2.5% and 6.5%, respectively.

The trigger? Cable provider Shaw Communications (TSX: SJR.B, NYSE: SJR) announced it would buy wireless upstart Wind Mobile for C$1.6 billion. Regulators still need to sign off, but Shaw expects to close the deal in the first half of 2016.

An Iron Grip

Why the strong reaction from investors? After all, Wind only has 940,000 subscribers across Alberta, British Columbia and Ontario. To put that in context, BCE has the smallest wireless business of the Big Three, with 8 million.

The answer lies in the fact that between them, BCE, Telus and Rogers have a lock on more than 90% of the Canadian wireless market, and investors are worried that, despite its small size, Wind—with Shaw’s backing—could be the challenger that finally storms the castle.

If any of this sounds familiar, it’s because we’ve been here before.

Starting in 2008, three privately held players, Wind, Public Mobile and Mobilicity, rose up to take on the Big Three.

The Canadian government, long fixated on the goal of a fourth national carrier—and the hoped-for savings it would deliver consumers—was happy to oblige, tilting the field in the new players’ favor by, among other things, keeping the Big Three from bidding on certain blocks of wireless spectrum.

But it wasn’t enough to keep the new entrants going. Public Mobile, with 260,000 subscribers, was the first to be acquired, by Telus in 2013. And this past summer, Rogers bought Mobilicity, which had been operating under bankruptcy protection since 2013, for C$465 million. To get the deal past the federal government, Rogers agreed to transfer 26 spectrum licenses to Wind, including 10 it had agreed to buy from Shaw under a previously agreed option.

That left Wind, with just 3% of the market, as the last independent standing.

BCE, Rogers and Telus also dodged a bullet in 2013, when Verizon Communications (NYSE: VZ) opted to buy the remaining 45% of Verizon Wireless from Vodafone plc (NYSE: VOD) for $130 billion. That move scuttled the US carrier’s plans to enter the Canadian market.

Bundles Level the Field

Now Wind is being taken off the market, but unlike Public Mobile and Mobilicity, it’s not falling into another wireless provider’s hands.

To Shaw, which has 3.2 million TV, Internet and home phone customers—but no wireless presence—Wind represents a potential game-changer in its turf battle with Telus, which also has roots in Western Canada. Like Shaw, Telus has strong positions in cable, Internet and home phone in the area, but its wireless business lets it offer all four in lower-priced bundles, something Shaw couldn’t match.

Now, with the acquisition of a growing wireless asset (thanks to its cut-rate pricing plans, Wind has grown its subscription base by 47% in the past two years, though its average revenue per user is 40% lower than the big players’), Shaw is poised to offer bundles of its own.

Even so, Wind has a ways to go before it can mount a realistic challenge. For one, it uses older 3G technology, so its service quality significantly trails the Big Three. Its coverage is also limited to major cities, and its clients must pay roaming fees if they wander outside those locales.

As a result, Shaw will have to spend heavily to match the big telcos’ reach and service levels, raising the specter of higher debt and/or dilutive share issues. That’s why Shaw shareholders sent the stock down 7.7% on the TSX on December 17, a steeper drop than any of the Big Three saw.

As well, Wind hasn’t signed a deal with Apple Inc. (NYSE: AAPL) to carry the iPhone and doesn’t expect to until it’s finished rolling out its 4G LTE network in 2017. Meantime, if Wind customers want to use iPhones, they must first buy the device outright, as the company can’t offer a subsidy.

By contrast, BCE’s 4G LTE network covers 98% of the Canadian population, while Telus boasts 97% coverage. And all three big telcos offer iPhones with a subsidy.

A Loyal Bunch

Something else to consider: Shaw is entering the wireless game just as the Big Three boost their customer service efforts.

And figures released earlier this month by the federal Commissioner for Complaints for Telecommunications Services suggest those moves are paying off. According to the agency, the overall number of complaints against the big wireless providers fell 12% in the year ended July 31, 2015.

Notably, while all three saw declines, Telus had the best performance, posting a 28.6% drop. Wind, for its part, saw a 37.6% increase in complaints.

The data fits with Telus’s reputation for having the best customer service in the business and the telcos’ latest churn rates: in the third quarter, 0.97% of Telus’s wireless users canceled their service, compared to 1.31% each for Rogers and BCE.

This was the ninth straight quarter that Telus’s churn rate came in below 1%, a particularly impressive feat in light of the fact that the period included the so-called “double cohort,” in which the government shortened three-year wireless contracts to two, freeing up many users to look elsewhere.