Canada’s plans to auction 700 MHz spectrum licenses will be contested by 15 entities looking to get their hands on wide-reaching spectrum set to be up for bidding beginning Jan. 14.
Entrants will include established wireless giants Rogers Communications, Bell Mobility and Telus Communications, as well as a handful of smaller, regional players including Saskatchewan Telecommunications, Globalive Wireless, MTS and Videotron. Other qualified bidders include 1770129 Alberta, BH Wave Acquisition Group, Bragg Communications, Feenix Wireless, Novus Wireless, TBayTel, The Catalyst Capital Group and Vecima Networks.
The Canadian government had originally planned on auctioning off 700 MHz spectrum licenses on Nov. 19, but earlier this year postponed the auction citing attempts to attract new entrants into the space. That attempt nearly landed the attention of U.S.-based telecom giant Verizon Communications, which dabbled with the idea of entering the Canadian space through the acquisition of beleaguered carriers. However, Verizon backed out of those plans following its move earlier this month to acquire the remaining stake in Verizon Wireless from Vodafone Group for $130 billion.
Canada’s wireless market is still dominated by Rogers, Bell Canada and Telus Mobility, with the two latter operators working through a network partnership that sees Bell Canada manage operations in the Eastern part of the country and Telus Mobility managing services in the Western part of Canada. The government previously attempted to infuse competition into the space through the auction of 1.7/2.1 GHz spectrum in 2008, though that has seen limited success as only a handful of carriers have entered the space, while others have sold off or attempted to sell off their spectrum holdings to established carriers.
Canada’s established carriers have been vocal in spouting their opposition to government regulation that could limit the amount of spectrum they can bid on during the auction, even citing public opinion polls.
In setting up the original rules for the 700 MHz auction, Industry Canada said it would apply spectrum caps to the auction in a move to ensure that at least four new entrants enter the wireless space. In addition, build out requirements for rural areas will also be in effect for those companies acquiring two blocks of paired spectrum. Those spectrum caps will place a limit on “prime” spectrum to incumbent operators that is expected to reserve those licenses for new entrants into the space.
“In the case of the 700 MHz spectrum, a limit on prime spectrum will be imposed on incumbents, which, like a set-aside, will effectively reserve prime spectrum for new entrants and regional providers,” Industry Canada noted last year. “Unlike a set-aside, the measures will not require Industry Canada to identify specific blocks of spectrum, allowing companies to bid according to their business plans.”
In addition, any provider that does not currently own spectrum in the lower bands would be allowed to purchase up to two new spectrum blocks at 700 MHz. The government also said it will apply “specific measures” for its planned 700 MHz spectrum auction “to see that rural Canadians will have access to the same advanced services as everyone else in a timely manner.” The propagation characteristics of the 700 MHz spectrum band are seen as ideal for providing mobile broadband coverage to the vast expanses of Canada outside of city centers.
The new regulations will require companies that control two or more blocks of paired spectrum in the 700 MHz band to cover 90% of the country’s population with their “current high-speed coverage” within five years and 97% within seven years of being granted the licenses. The government also said it would enforce general rollout timelines to both the 700 MHz and 2.5 GHz spectrum licenses ranging between 20% and 50% population coverage within a 10-year period.
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