Canada plans another wireless spectrum auction

Tue Jul 22, 2008 1:28pm EDT
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By Wojtek Dabrowski and Louise Egan

TORONTO/OTTAWA (Reuters) - The Canadian government plans to sell off more wireless spectrum in the next year and a half, following a heated auction of airwaves that raised C$4.25 billion ($4.21 billion) and could soon reshape the country's mobile phone market.

"There is what I refer to as the 700-series bandwidth," Industry Minister Jim Prentice told reporters. "There is an auction of that which will happen at some point in the future ... as I recall, it's about 18 months away."

The 700 megahertz airwaves are considered valuable because they can cover long distances and more easily penetrate obstacles such as thick walls and buildings.

Such an auction could further shake up Canada's wireless landscape by opening up more spectrum to firms other than the Big Three providers -- BCE, Telus Corp and Rogers Communications -- who currently rule the market.

In the United States, major wireless carriers spent billions earlier this year on securing 700 megahertz licenses. Verizon and AT&T won more than $16 billion of the licenses, according to auction results.

"They scored big time in terms of government revenues," Amit Kaminer, an analyst at telecom consulting firm SeaBoard Group, said of the U.S. auction. He added the 700 megahertz spectrum was formerly used for television broadcasting.

Prentice characterized the 700-series spectrum is "highly prized." The auction that concluded on Monday was a sale of spectrum in the 2 gigahertz range.

Prentice also said on Tuesday it could take up to a year to see increased competition in Canada's cellphone market in the wake of the latest auction.   Continued...

<p>Canada's Industry Minister Jim Prentice speaks during a news conference on Parliament Hill in Ottawa in this May 27, 2008 file photo. REUTERS/Chris Wattie</p>