Results Released Today of Canadian’s 700Mhz Spectrum Auction

February 19, 2014 - Written By Cory McNutt

We have been following the big 700-megahertz spectrum auction in Canada on January 14, 2014 and ended a week ago and the majority of dealings and legal reviews was done on Friday.  Industry Canada is required to post the results within five days after the proceedings are ended, barring any miscues.

The 700-megahertz spectrum is valued because of its ability to carry a signal over a long distance AND to penetrate buildings, making it the most desirable frequency.  The Canadian wireless companies, both big and small, need this spectrum to build networks that are more powerful and to help give Canadian users better coverage.

The government does not allow any discussions of details of the auction; even from the participants…it is like a national secret…so it is hard to determine exactly how spectrum each wireless company bid on and how high they bid.  Earlier, a spokesman for the Canadian Industry Minister, James Moore, declined to comment – he was not allowed to speculate any more than anybody else.  However, later in the day he tweeted (see below) and said that he would make the announcement tomorrow, February 19, in Ottawa at 5PM.

The bidders include the three largest carriers – Rogers Communications, TELUS Corp., and BCE Inc’s Bell – and the smaller regional operators that service the Providences of Quebec, Manitoba, Saskatchewan, and others.  The 700 megahertz spectrum auction is not expected to rise nearly as much money as the AWS auction in 2008, but sources claim that estimates of C$1.5 billion (US$1.4 billion) to C$1.8 billion (US$1.6 billion) would be reasonable.  The bulk of the spectrum will go to the big three incumbents, and the regional players Videtron, MTS, and SaskTel. Globalive, the parent company of Wind Mobile, decided to drop out of the race the day before the auction began.

There will not be any immediate changes, however, in the long-term the customers should benefit.  When all of the dust settles and the companies actually start using this new spectrum the customers should notice a big difference in reception quality, network speeds, and a new selection of smartphones.  These are all big pluses for Canada’s many wireless customers. The investors may see some fluctuation at first, but over the long-term they should benefit as well.

James Moore