More wireless spectrum for auction in 18 months
Wojtek Dabrowski and Louise Egan
Province
A pedestrian uses a cellphone while walking past a Rogers store in Ottawa yesterday. Photograph by : Reuters
OTTAWA — The federal government plans to sell off more wireless spectrum in the next year and a half, following a heated auction of airwaves that raised $4.25 billion and could soon reshape the country’s mobile-phone market.
“There is what I refer to as the 700-series bandwidth,” Industry Minister Jim Prentice told reporters. “There is an auction of that which will happen at some point in the future . . . as I recall, it’s about 18 months away.”
The 700 megahertz airwaves are considered valuable because they can cover long distances and more easily penetrate obstacles such as thick walls and buildings.
Such an auction could further shake up Canada‘s wireless landscape by opening up more spectrum to firms other than BCE, Telus Corp and Rogers Communications, the “Big Three” that currently rule the market.
In the U.S., major wireless carriers spent billions earlier this year on securing 700 megahertz licences. Verizon and AT&T won more than $16 billion of the licences, according to auction results.
“They scored big time in terms of government revenues,” Amit Kaminer, an analyst at telecom consulting firm SeaBoard Group, said of the U.S. auction. He added the 700 megahertz spectrum was formerly used for television broadcasting.
Prentice characterized the 700-series spectrum as “highly prized.” The auction that concluded on Monday was a sale of spectrum in the two-gigahertz range.
Prentice also said it could take up to a year to see increased competition in Canada‘s cellphone market in the wake of the latest auction.
“I’ve seen estimates . . . that it will be approximately a year before we see new competition, but I certainly anticipate that at some time between now and that date that we will begin to see new competition in the marketplace,” he said in Edmonton, Alberta.
Ottawa has taken steps to avoid “hoarding” by prohibiting new market entrants from selling their spectrum licences to the three big incumbents for the first five years of the 10-year licence, Prentice said. He added he expects those who won licenses will put the spectrum to “its highest productive use.” The auction, which ended on Monday after almost two months of bidding, raised more than twice the amount analysts had expected.
The government had set aside a chunk of airwaves exclusively for new players, a move aimed at fostering more competition and lowering prices for consumers. It has conditionally assigned 282 licences to 15 companies but will only award the final licences after ensuring the firms comply with a series of financial and ownership requirements.
© The Vancouver Province 2008
