None of the big four American telecoms has entered a bid on the 700 megahertz spectrum auction – meaning Canadians will continue to suffer from a lack of competition, according to telecom-Internet watchdog OpenMedia.ca.
Industry Canada today (September 23) published a list of all the initial bids for the coveted 700MHz spectrum – the airwaves over which wireless signals travel. There are just four blocks for sale and a total of 15 initial bids. The auction takes place in January.
American telecom Verizon Communications Inc. (NYSE:VZ) – which was rumoured to be considering entering the Canadian wireless market through the acquisition of one or two newer players and 700MHz spectrum – eventually put the speculation to rest and ended up buying out its shares from Vodafone.
But Canadian telecoms like Telus (TSX:T) continued to argue that the spectrum auction was skewed in favour of new entrants and that other American players, like AT&T (NYSE:T) could bid.
There was even speculation that other international players, like Vodafone – newly flush with cash from the Verizon share buyback – might enter the Canadian market. However, that hasn't happened.
To no one's surprise, Telus, Rogers Communications Inc. (TSX:RCI) and BCE Inc. (TSX:BCE) have all made initial bids on the 700 MHz spectrum.
So have regional players such as SaskTel, Videotron and MTS. Globalive Wireless Management Corp, which owns Wind, has also entered a bid.
Among the other bidders are two B.C. companies – Novus Wireless Inc. and Vecima Networks Inc.
Birch Hills Equity Partners Management Ltd. is also on the list of initial bidders. The private equity firm has been rumoured to be considering buying some of the smaller players, like Wind and Mobilicity.
Another bidder is Feenix Wireless, whose president and CEO is listed as John Bitove, also executive chairman of Mobilicity.
Despite a massive public relations campaign launched by Telus, Rogers and Bell against what they described as federal policies that might favour foreign competitors at the expense of Canadian companies, Canada's Big Three – which already own 85% of the spectrum – are "now poised to take the lion's share of the 700 MHz block of spectrum that's on the auction block in January," according to OpenMedia.ca.
"Today's news shows that Canada is still moving in the wrong direction, despite tens of thousands of Canadians speaking out for lower prices and authentic choice," said OpenMedia.ca executive director Steve Anderson
Despite pushback from the Canadian telecom industry, Industry Minister James Moore indicated his government plans to continue to try to foster more competition within the Canadian wireless market.
"In addition to this auction, our government will continue to aggressively pursue policies that ensure consumer interests are at the core of all government decisions," Moore said.
The sale of the four blocks of 700 MHz spectrum is expected to generate billions for the federal government.
Canada's last spectrum auction in 2008 raised $4.3 billion and introduced new entrants like Wind and Mobilicity. But at least one – Mobilicity – has struggled to gain market share in Canada, and is in financial trouble.
