September 10, 2013 / 5:05 PM / 6 years ago

Manitoba Tel says will not bid in spectrum auction

TORONTO (Reuters) - Regional Canadian telecom company Manitoba Telecom Services Inc does not plan to bid for prized 700 megahertz airwaves outside of its home province in an upcoming auction after a recent network asset sale, its chief executive said on Tuesday.

MTS agreed to sell its country-wide Allstream fiber optic network in May, essentially nixing any ambitions at building a national wireless company to compliment its landline and Internet offering in Manitoba, a largely rural western province.

“It would have to be a heck of a great deal to make it attractive to MTS now, so it is not currently the plan,” CEO Pierre Blouin said at an investor conference that was webcast to media, referring to a plan to bid broadly in the auction.

Blouin said that proceeds from the C$520 million ($502 million) sale would help MTS strengthen its position in Manitoba and allows investors to judge the company as a pure regional communications company.

Back in a 2008 auction, MTS bid for national airwaves with backing from the Canada Pension Plan Investment Board and private equity firm Blackstone but pulled back as prices spiked.

The national Allstream fiber optic network is used by all small new entrants to Canada’s wireless industry, Blouin said. It also has a sizable business selling communications services to corporate customers.

Blouin added that the Allstream sale, to Egyptian telecom tycoon Naguib Sawiris’ Accelero Capital Holdings, should close before the end of the year.

The auction of 700 MHz airwaves, highly valued for their ability to penetrate buildings and travel long distances, is expected to raise billions of dollars for the Canadian government. Companies hope securing this spectrum will help them support booming demand for mobile data such as video streaming.

Potential bidders must confirm their interest in entering the auction to the federal government by next Tuesday, with the auction due to start in January.

MTS signed a network-sharing deal with national provider Rogers Communications Inc in June that allows MTS to give its customers attractive national and international roaming rates, Blouin said.

($1 = $1.0356 Canadian)

Reporting by Alastair Sharp; editing by Andrew Hay

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