Canada raises C$2.11 billion in wireless airwaves auction

Fri Mar 6, 2015 3:30pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Alastair Sharp

TORONTO (Reuters) - Canadian wireless operators led by Telus Corp (T.TO: Quote) paid C$2.11 billion ($1.68 billion) in an auction of airwaves this week, with small operators paying far less than established players under a government plan to spur competition.

The auction structure limited Ottawa's cash haul. A U.S. auction of similar airwaves raised a record $44.9 billion in January.

Industry Minister James Moore, part of the Conservative government facing an election this year, said that assisting smaller players fuels competition and helps consumers.

But that policy has drawn criticism, as recent entrants struggle for meaningful market share.

"The government is throwing spectrum at new entrants who are not necessarily viable, ensuring that billions of dollars is being lost for a strategy that hasn't worked," said Canaccord Genuity analyst Dvai Ghose.

The country's biggest wireless operator, Rogers Communications Inc (RCIb.TO: Quote), missed out entirely, while small new-entrant Wind Mobile paid the minimum C$56.4 million for spectrum in populous British Columbia, Alberta and southern Ontario after its struggling rival Mobilicity did not bid.

"We won the beachfront property we wanted last year," Rogers spokeswoman Patricia Trott said via email, referring to the C$3.3 billion it paid for lower-frequency airwaves in 2014. "Some AWS-3 spectrum would have been nice to have when it’s usable in a few years, but we’re comfortable we can continue to meet our customers’ need for speed and capacity now and in the future."

Most of the airwaves, a finite resource phone companies rely on to upgrade service, were offered in single regional blocks the government had marked off-limits to the three big companies: Telus, Rogers, and BCE Inc's (BCE.TO: Quote) Bell.   Continued...

A pedestrian is reflected in the window of a Telus store while using a mobile phone in Ottawa in this file photo taken on February 11, 2011.  REUTERS/Chris Wattie