Canada looks to bolster new entrants (again) with AWS-3 auction

The Canadian government is looking to maintain a fresh supply of spectrum for that country’s mobile industry as well as attempting to encourage new entrants, announcing this week plans to conduct an auction of licenses in the 1.7/2.1 GHz band next year.
Industry Canada said the auction will include 50 megahertz of spectrum in the so-called AWS-3 band, with 30 megahertz of that spectrum set aside for “new entrants.” That spectrum will be adjacent to the current AWS band that the government auctioned off in 2008 in a previous attempt to attract new players into Canada’s wireless market that is dominated by nationwide players Rogers Wireless, Bell Canada and Telus Mobility.
Industry Canada also touted a “streamlined” auction process for the AWS-3 band that it says will allow the government agency to begin the bidding process before that of the 2.5 GHz band that is scheduled to begin on April 14, 2015.
“Our government will continue to make decisions that will lead to more choice, lower prices and better service for Canadian consumers,” said Industry Minister James Moore, in announcing the AWS-3 plans. “Today’s announcement will help operating new entrants acquire valuable new spectrum to help expand their networks and deliver fast, reliable service to Canadians. The rules for this auction, consistent with the ones for the 700 MHz and 2500 MHz auctions, will encourage more competition in the wireless market while ensuring the interests of consumers first.”
The AWS auction was designed to draw new entrants into Canada’s wireless market, however a number of companies that won licenses eventually sold off their interests to the established carriers. Industry Canada earlier this year completed the 700 MHz auction that generated nearly $4.8 billion in new bids, with the markets three largest operators walking away with the largest share of licenses. That auction process included more stringent rules designed to set aside spectrum blocks for new entrants.
Montreal-based Quebecor announced last month its intent to become a stronger nationwide player in Canada’s mobile space, saying it was ready to expand its presence in the country’s wireless market under the Videotron brand. Quebecor currently offers Videotron services in parts of Quebec tapping into 1.7/2.1 GHz spectrum licenses it acquired in 2008 for more than $550 million. The company recently acquired seven paired, 10-megahertz spectrum licenses for $210 million covering 28 million pops during the country’s 700 MHz spectrum auction. Those licenses covered Quebec, as well as Ontario, Alberta and British Columbia.
Quebecor said the company would look to offer consumers “competitive voice, data and roaming plans currently only available in Europe and Australia,” with it able to provide true competition to the country’s larger operators as “a fourth competitor who is experienced, well-financed, well-equipped, highly entrepreneurial and customer-focused.” The company added that it has so far invested more than $1.6 billion in its wireless network and spectrum assets.
However, the company also hinted that in order to become that No. 4 player, the Canadian government needed to enact “a fair and competitive federally regulated roaming policy” that would allow Videotron to offer competitive, nationwide services. The company cited a Competition Bureau of Canada report that said “incumbent players have used the roaming policy as a ‘strategic tool to eliminate or reduce the competitive pressure … in Canadian mobile wireless markets.’”
The Federal Communications Commission is set to auction off AWS-3 licenses later this year that will not include any restrictions on bidding eligibility, though it has set up bidding limitations for the 600 MHz incentive auction set to begin next year.
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