Videotron is making a play to increase competition for your smartphone business, while Telus’s CEO says that next-generation spectrum is so expensive in Canada that it’ll mean worse service or higher prices. In an auction that will shape the market for 5G services for a generation, the two firms and other providers agreed to pay the federal government $8.9 billion for slices of the wireless spectrum they need.
Videotron comes to play with the big kids: The Quebecor subsidiary paid $830 million for its 3,500-megahertz licences in Ontario, Manitoba, Alberta and British Columbia. That’s a big step out of its traditional domain in Quebec.
“VIDEOTRON HAS BROKEN THE BIG 3 OLIGOPOLY FOR THE BENEFIT OF CONSUMERS,” blared a company fact sheet on the auction results, referring to the wireless services it’s offered in its home province since 2006.
“Today, we are taking another step towards bringing leading-edge technology and healthy competition to more Canadian consumers,” Quebecor CEO Pierre Karl Péladeau said in a triumphant statement.
Quebecor is still hoping to buy Shaw Communications’ wireless business, depending on the results of Shaw’s merger with Rogers.
Don’t forget Cogeco: A second Quebec-based telco is sinking $205 million into wireless spectrum in the Toronto area.
Just keeping up is expensive for the Big Three: Canada’s biggest telcos—Bell, Rogers and Telus—paid a combined $7.3 billion for their slices of spectrum. That’s too much, according to Telus, which paid just under $2 billion for licences on its home turf in B.C. and Alberta, and in bigger markets in Ontario and Quebec.
“Canada’s position as a global leader in broadband networks is vulnerable to burdensome regulations governing access to spectrum,” Telus CEO Darren Entwistle said in a release.
Telus said U.S. carriers have paid an average of $1.19 per “MHz-pop” (a measure of the number of people in the area covered by a slice of spectrum), while Canadian national carriers paid $3.28. So “the impact of 5G on the Canadian economy will not transpire at the same level as other OECD countries, given our regulatory conditions and spectrum policies.”
Nipping at the edges: About a dozen regional telecom providers also won pieces of spectrum, helped by a “set-aside” provision for local competitors. Rural-service specialist Xplornet paid $244 million for 961 licences. IrisTel won eight slices of spectrum in Newfoundland and Labrador and the North for $483,000, but said it couldn’t buy more because a “malicious” tax audit is tying up over $80 million.