Canada's spectrum auction ends, raises C$4.25 billion

Mon Jul 21, 2008 4:38pm EDT
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By Wojtek Dabrowski

TORONTO (Reuters) - Canada's auction of wireless spectrum ended on Monday and new players appear poised to enter the market and challenge the country's Big Three carriers in a fight for mobile phone subscribers.

The auction of airwaves over which wireless services are delivered raised C$4.25 billion ($4.25 billion) in 331 rounds and almost two months of bidding. The proceeds were more than twice the amount analysts had expected.

"The auction exceeded our expectations in terms of the level of competitive bidding activity," Industry Minister Jim Prentice said in a statement.

Wireless spectrum has become a highly desirable asset for telecom companies that see data services such as wireless e-mail, text messaging and multimedia downloads as key to their growth. Having more spectrum lets companies offer a broader menu of services to a larger base of subscribers.

"Over the next few months, I expect every player -- large and small -- to be speaking with each other to find both strategic as well as tactical opportunities to consolidate market share," said Carmi Levy, an industry analyst at AR Communications.

According to the auction website, Rogers Communications Inc RCIb.TO, which owns Canada's largest wireless firm, was the top bidder with offers totaling C$999.4 million. The amount let the company secure spectrum in every area of the country, it said.

Rob Bruce, the president of Rogers' wireless unit, said the spending was a "responsible investment" and added the company sees diverse and growing opportunities in broadband wireless data services.

Telus Corp T.TO, Canada's No. 2 phone company, had C$879.9 million in standing high bids. BCE Inc BCE.TO, the biggest telecoms company in the country, had bids totaling C$740.9 million.   Continued...