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Wireless Auction Brings Government Close to $4.3 billion
by Gail Chiasson
Jul 22, 2008
Consumers and businesses are expected be the winners in a more competitive wireless market, following Industry Canada's announcement that 282 licences have been conditionally assigned to 15 companies in the Auction of Spectrum Licences for Advanced Wireless Services and Other Spectrum in the 2 GHz Range.

Bidding took place electronically over the Internet using secure encryption technology. The auction generated almost $4.3 billion in revenues for the Government of Canada. The money is expected to go into general revenue or be used to pay down Canada's debt.

Successful bidders are eligible to receive licences after making their final payments and showing compliance with Canadian ownership and control requirements.

It is expected the such companies as Globalive Communications Corp. and Quebecor will move quickly. Globalive, which sells Yak long-distance services in Toronto, spent $442 million to acquire licences to operate in provinces outside Quebec. Quebecor Media's subsidiary Videotron spent more than $554 million in licences in Quebec, and some industry pundits believe it might now join forces with Globalive to create a national network.

Montreal-based Quebecor Inc. won bids on 17 licences, mainly in Quebec but also in eastern Ontario and Toronto. The company currently resells access to the Rogers network in Quebec through Videotron, but the spectrum will allow Videotron to offer, through its own network, wireless telephony service including high-speed Internet, mobile television and several other advanced functions that can be accessed through the mobile devices.

Robert Dépatie, president and CEO of Videotron, says, “The prospect of increased competition in the near future will exert downward pressure on prices.

Data & Audio-Visual Enterprises (DAVE) Wireless Inc. - partly operated by Paul Allen, Microsoft co-founder, also bid on $243 million worth of spectrum in Ontario, Alberta and British Columbia. Among others, Shaw Communications Inc., and Bragg Communications Inc. were also successful bidders. A full list is found below.

"The auction exceeded our expectations in terms of the level of competitive bidding activity," says the Honourable Jim Prentice, Minister of Industry. "The industry now has an unprecedented opportunity - thanks to the government's Advanced Wireless Services (AWS) policy and auction - to develop products and services that offer choice to Canadian consumers and businesses. We think consumers will be the big winners in this auction."

Of the 105 megahertz of spectrum made available, 40 MHz was set aside exclusively for new entrants to bid on. The other 65 MHz was available to all bidders. The set-aside spectrum was put in place to help create a more competitive market and to increase the number of service providers, a decision designed to lead to lower prices.

The auction and policy are designed to increase competition and help the wireless industry develop new and robust services.

The AWS spectrum provides access to a growing range of innovative wireless applications. It enables next-generation technologies such as high-speed Internet and video, and it provides faster access for mobile phones and other hand-held devices.

Provisional winners include four numbered companies as well as: Bell Mobility Inc.; Blue Canada Wireless Inc.; Bragg Communications Inc.; Celluworld Inc.; Data & Audio-Visual Enterprises Wireless Inc.; Globalive Wireless LP; Novus Wireless Inc.; Rich Telecom Corp.; Rogers Communications Inc.; SaskTel; TELUS Communications Company.


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