Wireless spectrum auction won't include foreign bidders
Only Canadian companies on list of 15 applicants for 700 MHz band of radio spectrum released Monday
Bell Mobility, Rogers Communications and Quebecor's Vidéotron are among the prominent telecommunications companies that have put down a deposit to take part in Canada's wireless spectrum auction in January.
Industry Canada released a list of 15 participants Monday — including Telus Corp. and Globalive, the parent company of Wind Mobile — that have put down the refundable, five per cent deposit for the auction next Jan. 14.
None of the 15 are large foreign companies, but the list includes major regional players such as Vidéotron in Quebec, MTS Inc. in Manitoba and Bragg Communications in Atlantic Canada.
There was speculation this summer that a large foreign wireless provider might try to enter the Canadian market by bidding in the auction or buying out one of the smaller players like Wind or Mobilicity. The U.S. telecoms giant Verizon was initially mentioned as one likely new entrant but the company dispelled those rumours after it bought out Vodafone's stake in its wireless business, saying it was not interested in expanding to Canada.
Big 3 account for 25 million customers
Canada's big three carriers — Rogers, Bell and Telus — have about 25 million customers between them and dominate the market, making it difficult for new players of any size to attract customers.
However, the federal government has said it would like to have at least four wireless competitors in each region of the country.
The 700 megahertz auction of radio waves has been called the equivalent of "beachfront property" by analysts.
These radio waves have the ability to allow cellphone signals to reach into elevators, deep into underground parking lots, traffic tunnels and basements where calls are often dropped and will also help meet consumers' growing use of smartphones and tablets.
The signal can also travel greater distances and, in rural Canada, will require fewer cellphone towers to provide coverage.
The previous auction in 2008 raised $4.3 billion and brought more competition to the cellphone market with the launch of Wind Mobile, Mobilicity, Public Mobile, Vidéotron and Eastlink.
Not much hope for a 4th competitor
But analysts don't see a competitor for the big three emerging from this auction.
The federal government has mismanaged the wireless file for more than 30 years, allowing the development of an oligarchy that denies Canadians high-quality wireless, Eamon Hoey, managing partner of Hoey Associates, said after viewing the list of bidders.
"We don’t need four. What we need is one solid player. They say your service has to be a national thing, when in fact, this is a local service. This is like your old telephone service except it’s in the air," Hoey said in an interview with CBC's Lang & O'Leary Exchange.
"We could have carved out all kinds of local kinds of companies in terms of the licensing. They’ve chosen not to do that and that’s why I think we’ve had this catastrophic failure of three decades of public policy."
Hoey said Canadians have poor penetration and high cellular prices and little in this auction will help improve their service.
"Any one of these buyers could buy it and flip it. Put it on ice and then when the demand is there, sell it," he said.
He said three of the players who bid — Birch Hill, Catalyst and John Bitove — may be preparing to buy out struggling Mobilicity.