December 18, 2014 / 9:44 PM / 3 years ago

UPDATE 2-Canada unveils major wireless spectrum plan

(Adds analyst comment, context)

By Alastair Sharp

TORONTO, Dec 18 (Reuters) - The Canadian government unveiled a major update to its wireless airwave policy on Thursday, as it seeks to lower cellphone bills and bolster its coffers ahead of a federal election next year.

The plan for making more of the invisible infrastructure available for fast-growing mobile uses like video includes an auction of high-frequency AWS-3 spectrum beginning on March 3.

The same frequency of airwaves is being auctioned in the United States - raising $44 billion so far - which should encourage device makers to produce compatible gadgets.

The Canadian government, eager to promote competition to lower prices, said overall spectrum available for mobile services will have grown almost 60 percent by May compared with early this year.

By that point, a quarter of all wireless spectrum will be held by companies other than the three dominant national wireless providers - Rogers Communications Inc, Telus Corp and BCE Inc’s Bell - that had previously controlled some 97 percent of the airwaves, Industry Minister James Moore said at an event in Vancouver.

The plan, which includes blocking those three from bidding on some airwaves, should stimulate competition in wireless “through support of new entrants and ensuring that they will have access to the spectral resources they need,” telecom analyst Iain Grant, of Seaboard Group, said.

Critics questioned whether a policy in support of small companies was making best use of the finite spectrum.

“There’s more rhetoric than substance to today’s announcement,” Canaccord Genuity analyst Dvai Ghose said. “This rich and valuable national resource is being underutilized, I don’t really see how that’s being successful.”

The new entrants brought in after a 2008 auction have helped force down prices but have not taken significant market share, with one in creditor protection and another bought by Telus.

Companies expected to gain most from Ottawa’s moves include regional operator Quebecor Inc, which is considering expansion, and privately held Wind Mobile, which recently restructured after being forced to pull out of a 700 MHz auction earlier this year that raised C$5.27 billion for the government.

Other measures announced include consultations on lower-frequency 600 megahertz (MHz) airwaves currently used by television broadcasters; a path to relicense 3500 MHz airwaves; enabling a new competitor to offer rural wireless service via satellite and land-based networks using AWS-4 spectrum; and improving the licensing process for 24 gigahertz (GHz), 28 GHz and 38 GHz bands.

Editing by G Crosse, Christian Plumb and Leslie Adler

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