James Moore, Canada's Minister of Industry, has preached all along that he hopes this additional spectrum auction will "deliver more choice, lower prices and better service in Canada's wireless industry." We may soon find out if what he "hopes" for will come true as Canada's government officially kicked off the bidding war for AWS-3 spectrum at today's auction. The first round of AWS's auction was back in 2008, and while nobody expects the current AWS bidding to be like anything like the $5.27 billion that the 700MHz spectrum auction sale raised, it has definitely garnered as much attention.
Mr. Moore would like this AWS-3 auction – that has many stipulations – to once and for all create that fourth major carrier in Canada's wireless landscape, helping to bring those lower prices and increased competition. This spectrum auction, as others, is geared to favor the newer entrants, not the Big Three – Rogers, TELUS and Bell – incumbents. The government has set aside 30MHz of the available 50MHz for these new entrants, such as WIND Mobile, Mobilicity and Videotron, whose holdings are below 10-percent nationwide and less than 20-percent in their provincial market.
The importance of this AWS spectrum is that the winner of it will be able to deploy more LTE coverage and possibly lower the overall cost of service with increased choices or competition. The rules state that the winner of the spectrum will hold the license for 20 years and that licensees will be required to demonstrate to the Minister of Industry that this spectrum has been put to use as specified by deploying 40-60 percent within the first eight years – the percentage varies by region. The spectrum must be used to provide services predominantly to Canadians within their service area. Should a license be transferred during the initial eight years, the requirement for the new licensee to deploy will continue to be based on the initial license issuance date – it does not start over for a new eight year period.
The list of qualified bidders includes Bell, Eastlink, Mobilicity, MTS, Rogers, SaskTel, TBayTel, TELUS, Videotron, and WIND Mobile. It will be very interesting when the winners of the bidding are announced, as well as what will happen to Mobilicity if they win or lose the spectrum…something we will know until the announcement is made on March 6.