Canada has raised C$5.27bn from its auction of 700 MHz spectrum licences and gained a fourth national player after Quebecois telco Videotron significantly increased its footprint.
The Quebecor Media-owned operator spent C$233m on seven paired blocks of…
Canada has raised C$5.27bn from its auction of 700 MHz spectrum licences and gained a fourth national player after Quebecois telco Videotron significantly increased its footprint.
The Quebecor Media-owned operator spent C$233m on seven paired blocks of spectrum, expanding its reach to cover 80% of the country’s population.
As expected Canada’s three dominant operators – Bell, Rogers Wireless and Telus – acquired the lion’s share of the frequencies.
Rogers scooped up the best spectrum, buying 22 paired blocks across the country’s main markets for C$3.29bn.
Telus bought 16 paired blocks and 14 unpaired blocks for C$1.14bn, while Bell spent C$565m on 17 paired and 14 unpaired blocks.
Meanwhile smaller players Bragg, Feenix, MTS and Sasktel obtained a small number of licences.
Analysts had only expected the auction to raise around half of the C$5.27bn total.
In a statement Industry Canada, which ran the tender, said: “A fourth wireless provider obtained spectrum in every region of the country, delivering on our government’s commitment to encourage more competition in Canada’s wireless industry.”
The country’s government has made promoting competition in the mobile market a policy priority and has been looking for an operator to challenge the big three. The administration had suffered two blows last year after Verizon Communications decided against investing in the country and Vimpelcom, parent of Canada’s fourth-largest operator Wind Mobile, decided not to participate.
This created a vacuum which Videotron took advantage of. In a company statement Robert Depatie, president and CEO of Quebecor Media and CEO of Videotron, said: “Given the way the auction unfolded, Quebecor Media could not pass up the opportunity to invest in licences of such great intrinsic value in the rest of Canada.”
Videotron added that the C$0.83/MHz POP price it paid compared favourably with global prices for spectrum in the band.
According to local press reports the French Canadian company will not roll out a nationwide carrier unless it can gain significant concessions from Industry Canada. It is likely to ask the government to force its larger rivals to grant it secure roaming rights on their networks, and ensure that it can rent space on the big three’s towers at affordable rates, one report said
The head of Industry Canada, James Moore, was positive on Videotron’s expansion: “I think it’s great that [Videotron is] looking beyond their traditional footprint in the province of Quebec to provide my home province of British Columbia, Alberta and the province of Ontario a fourth option.”
RBC Capital Markets analyst Drew McReynolds said that Videotron now had four options: “Sitting on the spectrum in hopes of an eventual easing in spectrum transfer rules to incumbents; selling the spectrum to a non-incumbent; consolidating remaining new entrants and deploying the spectrum; and/or bringing in a financial or strategic partner.”
