Friday, May 29th18.7°C
25936
24291

Rules for next wireless auction could mean small carriers will bulk up

TORONTO - Ottawa set out the rules Monday for its upcoming auction of wireless spectrum, and some of them could make it relatively cheap for Canada's smaller carriers to upgrade the speed and features of their networks.

The move would potentially bulk up their competitive stance against industry giants Rogers, Telus and Bell.

Industry consultant Mark Goldberg says the opening bid threshold could be meaningful in the auction, which begins in March, because the bidding will be structured so that only one bidder may qualify in many of the 14 territories identified by Industry Canada.

The opening-bid minimums vary widely, depending on location and population density.

In the southern Ontario region, which covers a population of nearly 10.1 million, the opening bid for the set-aside spectrum is $33.3 million while the southern Quebec region, a population of nearly 5.7 million people, has an opening set-aside minimum bid of $20.5 million.

At the lower end of the scale, the opening bid for sparsely populated northern Quebec is $300,000.

"In Quebec, I think there's only one qualified bidder — Videotron," Goldberg said. "If they choose to bid, they'll be able to purchase that at the minimum bid price because there won't be any other bidders."

On the other hand, Videotron would not be able to bid for spectrum in Ontario because it doesn't operate there — unless it does some sort of deal before the bidding, such as acquiring Wind Mobile or Mobilicity.

"Is this something that could stimulate some of the consolidation that some people have speculated is behind the government's strategy? The opportunities to acquire a lot of spectrum at very low costs are certainly out there," Goldberg said in a phone interview.

Industry Canada says it will raise $162.45 million in total from the auction if the federal government receives just the minimum bid for each parcel of AWS-3 wireless spectrum.

That amount would be a far cry from the billions paid in previous auctions, including one earlier this year that brought in a total of $5.27 billion and an AWS-1 auction in 2008 that opened up the Canadian wireless industry to competition.

Barclays telecommunications analyst Philip Huang also wrote Monday that the Jan. 30 deadline for applications to the AWS-3 auction could be a catalyst for dealmaking, but added that the financial cost to Quebecor (TSX:QBR.B) could be substantial.

In Huang's opinion, Videotron would need to meet three conditions before it would make sense for the company to expand outside of Quebec — consolidate both Mobilicity and Wind, arrange financial backing and get sufficient government support.

"If these conditions are met, we believe it would make sense for Quebecor to pursue wireless expansion," Huang wrote.

Comments from the CEOs at Videotron and Wind in recent weeks have fuelled speculation that the two companies could combine forces in some way. Mobilicity is currently operating under court protection from creditors and the government has blocked Telus from buying it.

Although the likelihood of Videotron putting together a new national carrier is subject of much debate within industry circles, there's a generally held view among analysts that the Big Three wireless companies will be under increased pressure so long as it appears the federal government is intent on increasing competition.

Industry Minister James Moore announced earlier this month that 60 per cent of the available spectrum in the new auction will be set aside for rivals of Canada's three biggest wireless network operators while Rogers (TSX:RCI.B), Telus (TSX:T) and BCE's Bell (TSX:BCE) will be allowed to bid on only about 40 per cent of the AWS-3 spectrum to be auctioned

In order to bid on the restricted spectrum in a particular territory, the smaller companies must be operating in the area by the application deadline.

- Follow @DavidPaddon on Twitter.

The Canadian Press


Read more Business News

26181


Recent Trending




Today's Market
S&P TSX15107.00-3.47
S&P CDNX692.16+1.54
DJIA18126.12-36.87
Nasdaq5097.98-8.62
S&P 5002120.79-2.69
CDN Dollar0.8048+0.0002
Gold1187.40-16.90
Oil59.03+0.66
Lumber274.40+1.90
Natural Gas2.81-0.01

 
Okanagan Companies
Pacific Safety0.14+0.01
Knighthawk0.010.00
QHR Technologies Inc1.48-0.02
Cantex0.03-0.01
Anavex Life Sciences0.40-0.02
Metalex Ventures0.07-0.01
Russel Metals25.20-0.31
Copper Mountain Mining1.30+0.02
Colorado Resources0.10-0.01
ReliaBrand Inc0.0129-0.0010
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.15-0.00
Decisive Dividend Corporation2.10+0.16

 



26416

FEATURED Property
2291424216 - 600 Sarsons Road
2 bedrooms 2 baths
$478,800
more details
image2image2image2
Click here to feature your property
Please wait... loading


What's a robo-advisor?

Photo: ContributedIt can only be attributable to human error. -Hal, 2001: A Space Odyssey For most of us who are within thinking distance of retirement, the term “robo” conjures up image...


Cash stressed seniors

Photo: Thinkstock.comFor many Canadian homeowners, their house represents the biggest portion of their net worth. Now, increasing numbers of seniors are starting to recognize the hidden value of their...


Penetrate the smokescreen

Photo: ContributedHas this ever happened to you? You’re in the middle of your second or third “good discussion” with a prospect. Everything’s going great. The prospect seems en...

_





26418


Member of BC Press Council


25334