Marking the first phase in licensing personal communications services in Canada, 18 consortia said they are interested in offering next-generation wireless services.
Parties that wanted to participate in the licensing process were required to file expressions of interest with Industry Canada last month. One surprise entry was from a Calgary-based consortium that includes Hutchison Telecommunications Ltd., noted David Bosquet, national systems technologist for Industry Canada. None of the consortium’s members indicated interest in PCS prior to the formal deadline. “They’re a major player,” he added.
Bosquet said he expected about 20 parties would file in the initial application process. Conversely, analyst Ann Lynch of Boston-based BIS Strategic Decisions Inc. said there were “quite a few more [applicants] than I anticipated.”
Constructing a nationwide network will be a large undertaking, partly because of Canada’s vast expanse of land and population distribution, explained Lynch. Ninety percent of the nation’s 27.3 million citizens live within 200 miles of the U.S. border, and 60 percent of the population live in Quebec and Ontario. Densely populated Vancouver, British Columbia, presents a challenge for PCS operators, said Lynch, because it is so far west of the other large cities.
PCS won’t pose a significant competitive threat to cellular before the end of the century, Lynch predicted. Nationwide cellular operators Rogers Cantel Mobile Inc. and Bell Mobility likely will be major PCS players, said Lynch, and “they’ll be keen to protect their existing cellular base.”
The government has designated three 30 megahertz and three 10 megahertz spectrum blocks within the 1.9 GHz range for PCS services, leaving 20 megahertz for unlicensed services. However, Industry Canada said it won’t necessarily license all the spectrum. The number of licenses is contingent on how many and which parties it deems qualified. The most interested consortia indicated to Industry Canada they want a 30 megahertz license, but would accept a 10 megahertz license.
While the U.S. Treasury has garnished significant revenue from PCS spectrum auctions, Industry Canada generates a sizable sum from annual radio spectrum license fees. Lynch reported the Canadian government in 1994 received about $25 million (at a 1994 exchange rate) between the two cellular operators, charged on a site-by-site basis. Industry Canada said it plans to assess similar fees to PCS licensees.
The next stage in the licensing process is for participating entities to submit detailed business plans, due Sept. 15, noted Industry Canada. Based on applicants’ capabilities, financial solidity and business plans, Industry Canada stated it will select winners and award licenses by 1996.
The groups that filed are: Atlantic Telephone Co. Inc., Oakville, Ontario; Canadian Wireless Information Network Inc., Waterloo, Ontario, which includes the companies COM DEV International Ltd., Research in Motion Ltd. and Phase Atlantic Ltd.; Clearnet PCS Inc., Pickering, Ontario; Mobility Personacom Canada Ltd.-a division of Bell Mobility-of Etobicoke, Ontario; Ontario Telephone Association, Orleans, Ontario, which represents more than 20 telephone companies and a public utility commission; Rogers Cantel Mobile Inc., North York, Ontario; LanSer Personal Communications Inc., Westmount, Quebec; LTI Telecommunications Inc., Toronto; TeleZone Corp., Toronto; Microcell 1-2-1 of Montreal; OneWorld Telecommunications Ltd., Montreal; Star Communication Systems of Montreal; Prime Communications Corp. of North Vancouver, British Columbia; Spectrum Trading Inc., Surrey, British Columbia; Saskatchewan Telecommunications Holding Corp., Regina, Saskatchewan; Metro Calgary Fiber Services Inc., Calgary, Alberta; Wireless Interconnect Network Consortium, Calgary, Alberta, which includes WiLAN Inc., JRC Canada Inc. and PowerGrid Telecom Group; and the Calgary-based consortium including Hutchison Telecommunications Ltd., Distacom Telecommunications Inc. and Canadian Imperial Bank of Commerce c/o Husky Oil Ltd.
