Quebec-based carrier Vidéotron has scored wireless licences in the 700 megahertz spectrum in Ontario, B.C. and Alberta, creating potential for it to become Canada’s fourth carrier.
Telecom firms will pay $5.27 billion to gain access to wireless spectrum, Industry Minister James Moore said Wednesday, announcing the results of the auction.
The big three telecom firms — Bell, Rogers and Telus — each gained access to the spectrum across Canada, but more significantly there will be four carriers in each region. EastLink, MTS, Feenix and Sasktel also bought spectrum. Novus and TBayTel were shut out.
"The outcome of the auction supports more choice for Canadians by enabling a fourth wireless carrier in every region of the country," Moore said.
"A total of 97 licences were awarded to eight companies across the country. This wireless auction is a clear win for Canadians," he added.
The big three grabbed the lion's share of the 97 licences awarded: Rogers paid $3.3 billion for 22 licences, Bell paid $565 million for 31 licences and Telus paid $1.1 billion for 30 licences.
The new spectrum will result in better, stronger cellular signals that work in places such as elevators, basements and parking garages. It also will carry more data, at lower cost to the carriers, which Moore said should result in lower costs to consumers.
- FAQs about the 700Mhz wireless spectrum auction
The Conservative government has said it wants to improve the quality of service and reduce the prices charged to consumers by introducing more competition in wireless.
But hopes that American carrier Verizon would bid on the new spectrum were dashed last fall, when it didn’t enter a bid. And Wind Mobile, a small carrier which had hoped to boost its coverage across the country, dropped out of the auction after it failed to get financing.
There was a debate last summer ahead of the wireless auction about how to offer consumer choice, when small carriers such as Public Mobile and Mobilicity were squeezed out of the market by the big three.
Moore hailed today's auction results as a solution to wireless competition.
"Our government had one very clear goal, a goal that we’ve achieved, to take part in steps to create more choice and lower prices and better wireless services for Canadians and their families through more competition. With today’s results it’s very clear we’ve made the right decisions," he said.
The addition of Vidéotron, owned by Quebecor, as a carrier outside of Quebec opens the door to create a player who can compete on the scale of the bigger telecom companies.
Companies are obliged to use the spectrum or lose access to it, Moore said.
The previous auction in 2008 raised $4.3 billion for federal coffers and saw the addition of several new wireless companies.
Another auction for wireless licences for the 2,500 megahertz band is set for April 2015.
Four carriers in each market
- N.L.: Eastlink, Bell, Rogers, Telus
- N.S.: EastLink, Bell, Rogers, Telus
- P.E.I.: EastLink, Bell, Rogers, Telus
- N.B.: EastLink, Bell, Rogers, Telus
- Que.: Videotron, Rogers, Telus, Bell
- Southern Ont.: Videotron, Rogers, Telus, Bell
- Northern Ont.: EastLink, Rogers, Telus, Bell
- Yukon, N.W.T. and Nunavut: Bell, Feenix, Telus
- Man: MTS, Telus, Rogers, Bell
- Sask: SaskTel, Telus, Rogers, Bell
- Alta: Videotron, Telus, Rogers, Bell
- B.C.: Videotron, Telus, Rogers, Bell
The government has put rules in place for that auction that caps on how much 2,500 megahertz spectrum companies can own, a move Ottawa says will largely shut out Rogers and Bell because they already own large chunks of it.
Moore has also said legislation is coming on roaming rates that big telecom companies charge their small rivals for using their cellphone networks.
An announcement is also in the works on forcing telecom companies to use the spectrum they haven't deployed, or face losing it.