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Canadian bids top $557M

At the end of bidding last Thursday, total bids among the five Canadian companies still vying for 40 megahertz of additional spectrum in the 2 GHz frequency band had reached about $557 million.

A second company dropped out last week, leaving only five of the original seven contenders. Nova Scotia Ltd., through which Sprint Corp. was bidding as a newcomer to the Canadian market, withdrew from the auction after round 25. Incumbent operator Microcell Telecommunications pulled out after only seven rounds.

At the end of 27 rounds last Thursday, Bell Mobility Inc. held the high standing bid amount of $234 million, followed by the auction’s second newcomer W2N Inc., with total bids of $162.7 million.

Other incumbent operators Rogers Wireless Inc., Telus Communications Inc. and Thunder Bay Telephone are also still competing for spectrum. Rogers had bid $143.3 million total after 27 rounds, followed by Telus with $16.4 million in bids and Thunder Bay at $398,000.

Thunder Bay is bidding on additional capacity in less-populated northern Ontario, while the other companies are focusing on chunks of spectrum across the country.

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The southern Ontario region is drawing the highest bids, followed by southern Quebec and British Columbia.

Analysts estimate the government could reap anywhere from $668 million to $2.3 billion from the sale. That amount is much less than the U.S. personal communications services spectrum auction, which ended this week with total bids reaching $16.85 billion.

The new spectrum up for grabs is a 50-percent increase from current capacity and is needed for third-generation services in Canada. The auction, run by telecom regulator Industry Canada, is expected to last up to six weeks.

Each participant placed a $428 million deposit prior to the beginning of the auction on Jan. 15.

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