Free Market divvies up Canadian wireless spectrum

Canada is likely to see the introduction of two more national wireless carriers when additional PCS spectrum is auctioned off this November, suggest industry analysts.

Industry Minister John Manley said recently he will allow all existing players, as well as new contenders, to bid for additonal spectrum this November in 14 regions covering all of Canada, a decision many speculate will allow both Bell Mobility and Telus to buy their way into the national market. Currently, Bell Mobility is only licenced for spectrum in Ontario and Quebec, while Telus is restricted to B.C. and Alberta. Bell Mobility’s and Telus’ parent companies are the two largest telecommunications firms in Canada.

“Any kind of auction is certainly going to favour the buyer that comes to the table with the most money to spend,” said Mark Quigley, an analyst with the consulting firm, the Yankee Group in Canada.

Industry Canada plans to auction off 40Mhz of spectrum in four blocks in each of the 14 regions, most of which fall along provincial and territorial lines. The exceptions are Ontario and Quebec, which are divided into three regions each, and the Maritime provinces, which are grouped into one region.

In making his announcement, Manley said the additional spectrum will allow Canadian citizens to enjoy the services enabled by Third-Generation (3G) wireless technology sooner. Experts expect 3G-compliant wireless devices to have Internet connections that are four times faster than current WAP-enabled phones and PDAs.

But Bell Mobility spokesperson, Brian O’Shaughnessy told Network World Canada the extra spectrum, which will make up a third of the total PCS spectrum in Canada, is needed more in the event Canada’s cell phone penetration increases, as is projected by forecasts. Just under a quarter of Canadians carry cell phones now, but that number is expected to double over the next few years, said Shaughnessy, the vice-president of wireless technologies for Bell Mobility.

“Most browser calls use about 2Kbps to 3Kbps throughput in a 14.4Kbps channel,” Shaughnessy said. “So, by no means (should we) expect to see a huge change in straight browser services. Where it gets interesting when you get to higher speeds is for things such as e-mail and large file downloads.”

Bell currently has 35Mhz of spectrum in Ontario and Quebec. The spectrum cap is 55Mhz. Shaugnessy said the company needs to boost its spectrum in those provinces to at least 45Mhz, and possibly 55Mhz. In the other eight regions, Bell is able to bid for the maximum 40Mhz. The situation is similar for Telus, which has 35-40Mhz of spectrum out west. The three current national carriers – Clearnet, Microcell, and Rogers AT & T – hold between 30 and 43.7Mhz of spectrum.

Richard Buckingham, a New Brunswick entrepreneur hoping to enter the wireless market with his new 3G Networks company, expressed dismay that the five major carriers are being allowed to bid for more spectrum.

“I knew they were going to do that,” he said of Industry Canada’s decision to distribute the spectrum via an auction, which is only the government’s second but is quickly becoming a global standard. “I didn’t want them to, but that’s just the way they’re going to do it. They’re going to let the guys with the deepest pockets win.”

Buckingham believes Industry Canada’s decision was influenced by an auction of wireless spectrum in the U.K. last fall, one that netted the British government US$56.6 billion. Analysts are unsure how much the Canadian auction will pull in, with estimates ranging from half a billion dollars to more than $5 billion.

Earl Hoeg, the manager of wireless networks for Industry Canada and the department’s auction manager, defended the government’s decision to deviate from its previous routine of assigning spectrum on a case by case basis.

“We can say this in all honesty, ‘We’re not in it for the money,'” Hoeg maintained. “We’re in it to make sure Canadians get the services they demand.”

In the end though, Quigley said it will be the customers feeling the pinch.

“Companies are going to spend money to get this spectrum, period,” he said. “If there’s $600 million laid out to buy spectrum, that’s going to flow back to businesses and customers at some point in time. They’re going to want to recoup those costs somewhere.

“These guys aren’t in it because they feel they owe the world something. They do it to make a buck.”

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now