Canadian Wireless Auction Could Allow for New Nationwide Carrier

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Canadian Wireless Auction Could Allow for New Nationwide Carrier

6:00 am on May 27, 2008 | Category: Business, Telecom Services, Wireless, Regulation

The Canadian government is kicking off a major auction of wireless airwaves today, giving new bidders an opportunity to compete in Canada’s cell phone market.

About 40% of the available airwaves will be reserved new bidders such as Shaw Communications, Quebecor, Globalive Communications, and Manitoba Telecom Services, so as to foster increased competition in wireless. Primus Canada had also registered to participate in the auction as new bidders, but withdrew from the process late last week.

The remaining spectrum will be available to all bidders, including Rogers Communications, Bell Mobility, and Telus Mobility; Canada’s established cell phone carriers.

For a new entrant to pose a serious challenge to these incumbents, it will need to invest around C$1.5 billion in spectrum licenses, according to analysts.

The spectrum auction is expected to go on for several weeks, and could lay the groundwork for the launch of a new Canadian carrier sometime next year.

“Possibly next summer you could start to see the beginnings of these companies coming out with offerings, maybe even May or June of next year,” predicted Troy Crandall, an industry analyst with MacDougall, MacDougall and MacTier.

(Correction — 05/27/2008; 7:55 am — This article initially stated that Manitoba Telecom Services, the incumbent telecom provider in the province of Manitoba, had withdrawn from the bidding process. In actual fact, the company withdrew from an investment consortium involving the Canada Pension Plan Investment Board and Blackstone Capital Partners, but remains in the bidding as an individual corporate participant.)