Newspaper article The Canadian Press

Rules for Next Wireless Auction Could Mean Small Carriers Will Bulk Up

Newspaper article The Canadian Press

Rules for Next Wireless Auction Could Mean Small Carriers Will Bulk Up

Article excerpt

Gov't outlines rules for wireless auction

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TORONTO - Ottawa set out the rules Monday for its upcoming auction of wireless spectrum, and some of them could make it relatively cheap for Canada's smaller carriers to upgrade the speed and features of their networks.

The move would potentially bulk up their competitive stance against industry giants Rogers, Telus and Bell.

Industry consultant Mark Goldberg says the opening bid threshold could be meaningful in the auction, which begins in March, because the bidding will be structured so that only one bidder may qualify in many of the 14 territories identified by Industry Canada.

The opening-bid minimums vary widely, depending on location and population density.

In the southern Ontario region, which covers a population of nearly 10.1 million, the opening bid for the set-aside spectrum is $33.3 million while the southern Quebec region, a population of nearly 5.7 million people, has an opening set-aside minimum bid of $20.5 million.

At the lower end of the scale, the opening bid for sparsely populated northern Quebec is $300,000.

"In Quebec, I think there's only one qualified bidder -- Videotron," Goldberg said. "If they choose to bid, they'll be able to purchase that at the minimum bid price because there won't be any other bidders."

On the other hand, Videotron would not be able to bid for spectrum in Ontario because it doesn't operate there -- unless it does some sort of deal before the bidding, such as acquiring Wind Mobile or Mobilicity.

"Is this something that could stimulate some of the consolidation that some people have speculated is behind the government's strategy? The opportunities to acquire a lot of spectrum at very low costs are certainly out there," Goldberg said in a phone interview.

Industry Canada says it will raise $162.45 million in total from the auction if the federal government receives just the minimum bid for each parcel of AWS-3 wireless spectrum.

That amount would be a far cry from the billions paid in previous auctions, including one earlier this year that brought in a total of $5. …

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