Canada Raises $1.7B in AWS-3 Auction

Canada's auction of spectrum in the AWS-3 band raised a total of C$2.11 billion ($1.67 billion) for the government, with five companies picking up new licenses.

The spectrum will support the introduction of higher-speed mobile data offerings, although overall proceeds were just a fraction of the $45 billion raised from the recent AWS-3 auction in the US, where demand for mobile data services is rampant. (See Hey Big Spenders! AT&T, Dish & VZ Splash Cash on Spectrum.)

Restrictions on the "big three" operators -- BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), Rogers Communications Inc. (Toronto: RCI) and Telus Corp. (NYSE: TU; Toronto: T) -- heavily affected the outcome, with 30MHz of the 50MHz on offer reserved for other bidders.

Even so, Telus emerged as the biggest spender, splashing more than C$1.51 billion ($1.2 billion) on 15 licenses covering more than 30 million people, while Bell Mobility paid nearly $500 million ($396 million) for 13 licenses covering nearly 13.5 million people.

Rogers, however, did not secure any AWS-3 spectrum. Having been the most lavish spender during last year's more lucrative auction of 700MHz airwaves, Rogers appeared nonchalant about the AWS-3 results, reportedly playing down its need for additional spectrum.

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That worked out well for new entrant Wind Mobile , as did the last-minute withdrawal from the auction of rival Mobilicity, which is currently operating under bankruptcy protection. Paying minimum rates for its spectrum, Wind spent just C$56.4 million ($44.7 billion) on three licenses covering about 18 million people.

"I am so proud of the competition and true choice we bring to Canadians!!" tweeted Wind CEO Tony Lacavera. "Next up: Wind LTE services rollout."

The other license winners were Videotron Ltd. , which spent C$31.8 million ($25.2 million) on licenses covering about 10 million people, and Bragg Communications, which picked up four licenses covering 3.1 million people for C$9.96 million ($7.9 million).

But spectrum reserved for new entrants remained unsold in less populous parts of Canada.

Canada's government claims that regulatory moves aimed at bolstering competition in the mobile market are paying off. The prices of mobile services have fallen by an average of 22% since 2008, according to authorities.

The government is planning to hold an auction of 2.5GHz spectrum in April.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

COMMENTS Add Comment
danielcawrey 3/8/2015 | 1:08:35 PM
Rural I can see how spectrum is incredibly important to ensuring that people have converage in rural areas of Canada.

That being said, I'm can't imagine it's an entirely profiltable business model. I wonder how much the government has a hand in supporting these efforts financially after the auctions?
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