The Canadian Government conducted a 700Mhz spectrum auction on January 14, and are to announce the provisional license winners five business days after the last bid and after being verified by an independent third-party. During that waiting period, none of the participants in the auction was allowed to discuss it with each other, the public, or the reporters – so nobody knows which carriers bid for what spectrum.
WIND Mobile’s parent company, Globalive, dropped out of the auction the day before it started, leaving ten companies to do the bidding – Bell Mobility, Rogers, TELUS, Bragg Communications, Feenix Wireless, MTS, Novus Wireless, Saskatchewan (SaskTel), TBayTel, and Videotron.
There are 14 regions involved in the auction and the “incumbents,” Rogers, TELUS, and Bell, the three largest carriers, are limited to purchasing only one block of paired spectrum per each region. The “new entrants” – which are any carriers that have under a 10-percent share of Canada’s wireless market – were allowed to bid on two blocks.
Videotron has the resources to buy a large amount of spectrum, even though they are only a regional carrier, however there are rumors that they would like to expand outside their local province of Quebec. Analysts believe that Videotron wants to launch a national network to compete directly with Rogers, TELUS, and Bell and they are could do that by working with ailing Mobilicity.
What does all of this mean to the wireless customers and the investors – not much in the short-term, because there were no “foreign” players, such as Verizon. However, in the long-term, when the companies start using the new spectrum, the customers should notice a big difference in reception quality, network speeds, and the availability of new headsets – a definite win for the customers.
The investors could see some fluctuations, as the big three market the new services and purchase new smartphones to put in the hands of their customers. However, as time progresses, they should see an improvement in the Average Revenue Per User (ARPU) – something that has been missing the past couple of years. This is something that is long overdue and was bound to happen, but in the long run the investors should also benefit.
We will find out the winners and losers later today from 12:30 PM EST, when Industry Canada reveals the auction results. They said that Industry Minister, James Moore, “will make an announcement regarding Canada’s wireless industry,” after which he will take questions from the reporters.