Canada’s attempt to infuse more competition into its wireless space gained more clarity as the country’s telecommunications regulator laid out rules for the transfer of spectrum licenses. The rules follow the government’s recent re-booting of its competition initiative that saw Industry Canada refuse consolidation between a pair of operators.
Industry Canada noted that as part of the new framework, the government would work to provide consumers with at least four wireless options in each region of the country, building off the current environment that is dominated by three nationwide operators and a handful of regional players. Those nationwide operators – Rogers Wireless, Bell Canada and Telus Mobility – currently control more than 90% of the country’s wireless market share.
The basics of the framework are that any change of control of a spectrum license will have to go through a review process by Industry Canada and gain approval from the agency’s minister. Spectrum included in the review process will include the already being used 850 MHz, 1.7/2.1 GHz, 1.9 GHz and 2.3 GHz bands, as well as the inclusion of spectrum set to be auctioned by the government in the 700 MHz and 2.5 GHz bands.
Factors taken into account will include:
–The current license holdings of the applicants and their affiliates in the licensed area.
–The overall distribution of license holdings in the licensed spectrum band and commercial mobile spectrum bands in the licensed area.
–The current and/or prospective services to be provided and the technologies available using the licensed spectrum band.
–The availability of alternative spectrum that has similar properties to the licensed spectrum band.
–The relative utility (e.g. above and below 1 GHz) and substitutability of the licensed spectrum and other commercial mobile spectrum bands in the licensed area.
–The degree to which the applicants and their affiliates have deployed networks and the capacity of those networks.
–The characteristics of the region, including urban/rural status, population levels and density, or other factors that impact spectrum capacity or congestion.
–Any other factors relevant to the policy objectives outlined in the framework that may arise from the license transfer.
The government also laid out a timeline for reviewing spectrum license transfers, noting a decision should be made within 12 weeks from the time that all information regarding the transfer is submitted.
The regulations come on the heels of Industry Canada refusing to approve Telus’ $370 million acquisition of regional operator Mobilicity citing the initial requirement that Mobilicity’s 1.7/2.1 GHz spectrum licenses be used by new entrants in the space. At the time of the ruling, Industry Canada said it planned to more actively promote competition in the wireless space, announcing a number of decisions that it said would ensure that consumers have at least four choices in wireless communications across every region of the country. That followed a similar announcement last year to also bring more competition to the country’s mobile space.
The recent decision also postponed the auction of 700 MHz spectrum licenses until early next year. Industry Canada said the application deadline to participate in that auction has now been set for Sept. 17, with the auction slated to begin on Jan. 14, 2014.
That spectrum auction has reportedly been at the heart of U.S. telecom provider Verizon Communications potential entry into the Canadian market. Published reports have indicated that Verizon is in talks to acquire up to two troubled Canadian operators ahead of the 700 MHz spectrum auction. Verizon currently controls 55% of Verizon Wireless, which relies on the 700 MHz spectrum band for the basis of its nationwide LTE network and could garner strong economies of scale if it were to attempt a similar deployment in Canada.
Bored? Why not follow me on Twitter?
