OTTAWA – Finally, after nearly two months of bidding, involving 331 rounds, Canada’s auction of wireless spectrum ended today, but is merely the first wave of change that will transform the nation’s telecommunications industry.
Canadian companies bid a total of $4.25 billion for 282 wireless-airwave licenses, the proceeds are more than twice the amount analysts had expected. The 15 successful bidders of the auction that began May 27 are eligible to receive licenses after making their final payments and showing compliance with Canadian ownership and control requirements.
Rogers Communications, Canada’s largest wireless carrier, bid $999.4 million for 59 licenses, reports Industry Canada. Telus Corp. offered $879.9 million, also grabbing 59 licenses, and BCE Inc. captured 54 licenses by spending $740.9 million.
The auction included spectrum that supports advanced services such as mobile music and television. Rogers, Telus and BCE plan to use the additional spectrum to provide new services geared towards the estimated one-third of Canadians that still don’t own a mobile phone.
While Canada’s top three telecommunications giants, who account for 94% of wireless companies, made the biggest splash, a number of “smaller” competitors also entered the market. The government reserved 40 megahertz of the 105 megahertz of spectrum exclusively for new entrants to offer services to Canada’s 20 million mobile phone users.
Companies to keep an eye and ear on include Toronto-based Globalive Wireless, which currently sells home phone and internet service under the Yak brand, which bid $442.1 million for licenses across Canada, and Montreal-based Quebecor Inc., offering $554.5 million for licenses in Quebec. It’s widely speculated that Globalive will eventually partner with Quebecor to crack the Quebec market so it can become Canada’s next national wireless provider.
This is an historic event for wireless users across the country,” said Anthony Lacavera, chairman and chief executive officer of Globalive Communications Corp. “It marks a new era of choice in Canada’s wireless world. At Globalive, we have earned a track record of innovation; that’s exactly what Canadians can expect from us when we announce our wireless offerings.”
In the Maritimes, EastLink announced it plans to build an advanced wireless network after securing wireless spectrum in Atlantic Canada, Northern and Southern Ontario and Grand Prairie. EastLink currently owns and operates cable systems in these areas.
"EastLink’s goal throughout the auction was to secure spectrum so we can serve our customers and launch a competitive mobile phone service. We were successful," said Lee Bragg, co-CEO EastLink. "It is an exciting time as we prepare to enter a new line of business that enables us to be a full-service provider for both residential and business customers. We will finalize our plans on when the service will be available over the next couple months and hope to be in market within the next year."
In 1999, EastLink entered the local telephone business and became the first cable company in Canada to launch a competitive telephone service. In 2000, the company launched communications and entertainment bundles and secured its position as a market leader.
EastLink plans to build the most technologically advanced network that will be compatible with North American and Global standards added Bragg.
"EastLink will be looking to launch next generation services that will allow customers to integrate their mobile phone with their home entertainment services. This will ensure our customers have access to the best and most advanced technology options available."
Shaw Communications bid $189.5 million for licenses in the western provinces of British Columbia, Alberta, Saskatchewan and Manitoba. The Calgary-based company still has not detailed its strategy for wireless services and if it will be seeking partners to expand into the wireless market.
Manitoba Telecom Services Inc. bid $40.8 million for licenses in its home province. The company scaled back its bidding after a group of investors formed to finance its purchases dissolved before the auction began.
The new entrants are widely expected to build third-generation (3G) networks based on the global system for mobile communications (GSM) technology or its newer fourth-generation offshoot, long-term evolution (LTE).
The biggest initial obstacle for the new upstarts will be in securing rights for transmission sites, many of which are buildings or towers owned by Rogers, Bell and Telus. They will be aided however by Industry Canada rules that force existing mobile carriers to offer reasonably priced roaming on their own networks and rent space on their towers for equipment, which will allow some to begin offering competitive services as early as next spring.
Despite the billions spent in bidding, consumers are likely to see more competitive prices with new services; bundles of services and more innovation say telecom experts. For example consumers could eventually be enticed to receive advertising on their mobile phones, such as electronic coupons, by receiving a reduction on their monthly bills.
