Canada’s industry minister James Moore has reaffirmed the terms of the upcoming auction of 700 MHz frequencies in the face of vigorous lobbying by the country’s incumbent wireless operators.
Four paired spectrum blocks will be sold in January’s…
Canada’s industry minister James Moore has reaffirmed the terms of the upcoming auction of 700 MHz frequencies in the face of vigorous lobbying by the country’s incumbent wireless operators.
Four paired spectrum blocks will be sold in January’s tender and major players Bell Canada, Rogers Communications and Telus will be allowed to acquire one licence each.
However, a smaller operator or new entrant to the market will be allowed to bid for two licences, which could leave one incumbent, or more, empty-handed.
US wireless giant Verizon Communications has been reported to be taking a serious interest in competing in the auction which, if it were to secure frequencies, could create a powerful new force in Canada’s wireless market.
Moore told Bloomberg that the rules would not change because any challenger to the big three would need that scale of spectrum to compete nationwide. The government’s telecoms policy was not designed to strengthen the position of incumbents but rather to increase competition, he said.
In a separate interview with Reuters, Moore dismissed suggestions that the government had rolled out the red carpet for Verizon saying that the auction would not be a “cakewalk for anybody”.
The deadline for potential auction participants to submit 5% deposits so they can compete in the 700 MHz auction is 17 September.
Separately, when asked about the possibility of Rogers helping private equity firm Birch Hill Equity Partners fund the acquisitions of smaller operators Wind Mobile and Mobilicity, Moore would not comment specifically. However, he said that any proposal put to the government would be examined with competition in mind.
No plans to intervene on BlackBerry
Meanwhile, Moore told Bloomberg that the government had no plans to help struggling Ontario-based handset maker BlackBerry.
The minister said it was for the company to provide popular products to turn itself around.
Canada is historically protectionist when it comes to the ownership of its companies and the government has previously indicated it would like the smartphone maker to remain in Canadian hands.
Recent figures show that the once-market leader now has a mere 2.9% of the global smartphone market. Its shares which once traded as high as US$144 in 2008 are now trading around the US$10 mark.
BlackBerry formed a special committee 10 days ago to examine strategic options for the business including joint ventures, strategic partnerships or a sale.
JP Morgan was appointed as financial adviser and Skadden, Arps, Slate, Meagher & Flom and Torys are serving as legal advisers.
Analysts reacted to the news positively as did the company’s share price, but some industry watchers are sceptical about whether it will bring about a solution for the company any time soon.
