July 24, 2008

Canada Stirs Wireless Pot

By Jonathan Tombes

Ottawa's eight-week long auction of 282 spectrum licenses for advanced wireless services (AWS) generated lots of Canadian dollars - nearly $4.3 billion - and plenty of market disruption.

Investors ran faster than expected. Bids for the variously sized (5 MHz, 10 MHz and 20 MHz) channels available in markets across the country went through 331 rounds.

"The auction exceeded our expectations in terms of the level of competitive bidding activity," said Ministry of Industry Spokesman Jim Prentice, in a statement. "The industry now has an unprecedented opportunity … to develop products and services that offer choice to Canadian consumers and businesses."

The money is big, but then the Washington wireless auctions in 2006 and again this year generated about $34 billion between them. What seems bigger is the market commotion.

More competition

Ottawa engineered some of that disruption into the process, reserving nearly 40 percent of available spectrum exclusively for newcomers.

That forced opening led to some curious double takes, such as this post at Wirelessnorth.ca: "Who the crap is Niagra Networks?"

As per official Industry Canada figures, Niagra Networks was the largest bidder by far in terms of spectrum points requested (6,510 points). But the company apparently overreached; Niagra didn't make it to the list of the list of provisional winners released on Monday.

The largest bidder declared a provisional winner was Rogers Communications (4,030 points). No shocker there. Rogers is widely known as a full service telecommunications provider, coast-to-coast wireless spectrum already included.

More noteworthy than Rogers' getting in this AWS game is the shifting competitive landscape that it faces. Ranking sixth and seventh on the list of bidders (with 3,360 points between them) are incumbents Telus and Bell Mobility. These providers could amplify their respective strengths in western and eastern Canada and compete more directly against Rogers' GSM network by switching their CDMA networks to the GSM standard, even the latest iteration of that standard: 4G LTE.

One newcomer is Calgary-based Shaw Communications, which came in second (after Rogers) on the list of points successfully requested (3,076 points). Therein lies one potential consequence to becoming a full service telecommunications provider: once-friendly cable brethren positioning themselves to compete against each other more than simply bragging rights.

Back on Canada's east coast and in Rogers' backyard is Bragg Communications, owner of not only of East Link Cable but also the more geographically diverse Persona Communications. Bragg was ninth on the list (356 points).

Other successful bidders with even stronger national wireless aspirations are MTS Allstream (a sort of Canadian Level 3) and Videotron's parent Quebec Inc. (2,643 and 2,480 points respectively.)

That leaves newcomers Globalive and Data & Audio Visual Enterprises (DAVE) Wireless to round out the top nine. Whether they - and others on the list - intend to build or trade is another question, one addressed in this roundup ("… let the real games begin") by Globe and Mail reporter Andrew Willis.

Provisionally successful bidders on AWS in Canada and spectrum points requested:

Rogers Communications - 4,030
1380057 Albert Ltd. (Shaw) - 3,076
6934242 Canada Ltd. (MTS Allstream) - 2,643
9193-2962 Quebec Inc. (Videotron) - 2,480
Globalive Wireless LP - 1,892
Telus Communications Co. - 1,860
Bell Mobility - 1,500
Data & Audio Visual Enterprises Wireless - 972
Bragg Communications - 356
Novus Wireless - 340
SaskTel - 213
Blue Canada Wireless - 120
Celluworld - 12
Rich Telecom Corp. - 6

Source: Industry Canada

- Jonathan Tombes

Read more news and analysis on Communications Technology's Web site at http://www.cable360.net/ct/news/.