Cap could help Telus edge out Rogers and Bell in 2500 MHz spectrum auction

Industry Canada is holding another spectrum auction today and a limit on how much of 250 MHz frequency band or airwaves a carrier can hold could tip the balance in favour of Vancouver-based Telus Corp.

Unlike the AWS-3 auction held in March this year, this auction does not come with rules designed to level the playing field for new entrants.

However, the 2500 MHz auction does come with a cap of 40 MHz per region. That limit will be in place for five years from the date any of the 20-year licenses are issued in 58 of the 61 areas where airwaves are available for auctions. The cap does not cover Northern Canada.

“Today, bidding begins in the 2500 MHz wireless spectrum auction. Eleven Canadian companies will compete for spectrum—a valuable public resource on which wireless information travels,” said James Moore, Canada’s minister of industry. “Through this auction, new competitors will have the opportunity to acquire even more spectrum to deliver better service.”

The country’s two other major carriers, Rogers Communications Inc., and BCE Inc., already exceed the 250MHz cap in 13 contested areas in and around Toronto, Montreal and Vancouver.

That leaves Telus, which does not hold a license in the 250MHz band, a wide opportunity to snap up as much as it could of the new spectrum.

With two of the industry’s major players hampered by the cap, new entrants and rural carriers also stand a better chance of grabbing some of the spectrum which can be used for high-bandwidth activities such as video streaming.

For example, Bragg Communications and MTS Inc. also have no license in the band. Wind Mobile Corp, Videotron Ltd., Atlantic Canada operator Eastlink Wireless, CCI Wireless, SSI Internet Inc., Tbaytel and Xplornet Communications are among the smaller operators who have registered for the auction.

Moore said this year’s two spectrum auctions are meant to give new wireless companies a chance to possess more wireless spectrum.

“Less than one year ago, nearly 90 per cent of spectrum was held by Canada’s largest wireless companies,” he said. “ As a result of this 2500 MHz spectrum auction and last month’s highly successful AWS-3 spectrum auction, new wireless companies are expected to hold approximately 25 per cent of the total wireless spectrum available.”

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Nestor E. Arellano
Nestor E. Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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