The Canadian government has announced that 60% of the 50 MHz of AWS-3 spectrum it plans to auction next year will be reserved for smaller players and new entrants.
The industry ministry Industry Canada said the tender will begin on 3 March 2015 and…
The Canadian government has announced that 60% of the 50 MHz of AWS-3 spectrum it plans to auction next year will be reserved for smaller players and new entrants.
The industry ministry Industry Canada said the tender will begin on 3 March 2015 and wants the frequencies to be deployed to improve coverage in rural areas.
By reserving the bulk of the airwaves for smaller players, Canada hopes to boost competition to lower prices for consumers.
Existing regional operators such as Wind Mobile, Eastlink and Videotron – which all entered the mobile market in 2008 after winning AWS spectrum – will be eligible to bid, as well as new companies.
The government is setting aside one 30 MHz block in each region for a new entrant and will make two 10 MHz blocks open to all bidders. The licences will come with ‘use it or lose it’ clauses to try and ensure that the spectrum will be used.
Anthony Lacavera, chairman of Wind, praised the government’s decision and said that it reinforced its commitment to smaller operators. However, he did not confirm that Wind would be bidding.
Pierre Dion, head of Videotron’s parent Quebecor, was similarly effusive, but took the opportunity to reiterate that other regulatory measures, including roaming fees based on the “real cost” of network usage and better terms for tower-sharing were also very important in promoting competition.
The total reserve price for the spectrum is C$162.5m (US$140m). In the US, the auction of AWS-3 airwaves has been going on for weeks and has now passed the US$44bn mark in terms of provisional bids, far beyond expectations.
Canada’s conservative government has had a policy over recent years of promoting competition in the Canadian mobile market to challenge the dominance of the big three operators: Bell Canada, Rogers Wireless, and Telus Mobility.
Industry Canada has been seeking to coax the smaller operators to consolidate to create a scaled national fourth player. RBC Capital Markets analyst Drew McReynolds said in a note to clients that he expected a stronger, recapitalised fourth national wireless player to emerge in 2015, but does not expect this operator to make a significant dent in the leaders’ market share.
Industry Canada also said it is exploring how to make 600 MHz and 3.5 GHz frequencies available for mobile services. In addition, it is planning to enable the use of AWS-4 spectrum held in Canada by Terrestar Solutions, a satellite venture.
Montreal-based Terrestar said it will be licensed by the ministry to utilise 40 MHz in the AWS-4 band and 20 MHz of mobile satellite spectrum to provide mobile satellite and terrestrial services nationwide.
“This significant milestone will allow Terrestar Solutions to become an active player in the Canadian wireless landscape,” according to Jacques Leduc, the company’s CFO.
Industry Canada said it had generally aligned its AWS-4 framework with the US to ensure there is a handset ecosystem compatible with the spectrum.
Earlier this month, Lacavera told TelecomFinance that device compatibility was key to Wind’s strategic options in the mobile market. He noted that while there were no AWS-3 handsets available at the moment, the way the US auction was progressing meant Wind was fairly certain that appropriately configured devices would become available in Canada. “This is encouraging for us in terms of our alternatives,” said Lacavera.
