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10 Canadian telecoms are now qualified to bid on leftover 4G spectrum

Among the qualified bidders: Freedom Mobile, Cogeco and Xplornet

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Ten Canadian telecom companies have been confirmed as qualified bidders for the government’s upcoming auction on residual 4G spectrum.

Innovation, Science and Economic Development Canada (ISED) listed the applicants last week and confirmed the bidders today, April 10th. The list comprises the following:

Perhaps the most intriguing names on the list are the smaller telecom companies working towards securing their places in Canada’s competitive wireless market, such as Xplornet and Cogeco.

As a scarce resource, the extra spectrum could be especially meaningful to these companies in comparison to the larger incumbents, Rogers and Telus.

In a note to investors ahead of Cogeco’s Friday financial earnings call, Scotiabank’s Jeff Fan wrote that they believe Cogeco’s interest in 2500MHz spectrum doesn’t necessarily indicate interest in the upcoming 600MHz auction.

“The 2500MHz auction uses Tier 3 geographical regions, which lets [Cogeco] acquire spectrum in markets where they have cable offerings without paying for spectrum in larger cities like Toronto,” wrote Fan.

This is in contrast to the 600MHz auction, where ISED has decided to maintain Tier 2 license areas, which cover much larger areas beyond Cogeco’s cable operating footprint.

The analyst also believes Shaw’s Freedom Mobile will be a “strong competitor” for the licenses that Cogeco desires. Additionally, since the auction is in a sealed bid format, Fan believes the chances of Cogeco picking up the licenses are low.

In December 2017, ISED published its framework for auctioning unassigned or returned spectrum licenses in the 700MHz and 2500MHz bands, among others.

The 700MHz band, which Rogers relies on the 700MHz for its LTE service and which Shaw recently invested in through a purchase from Quebecor, was auctioned in August 2015. The remaining blocks of spectrum that ISED will auction are situated in the Yukon, Nunavut and Northwest Territories.

The 2500MHz band went up for auction in May 2015. In total, there are 62 licenses from that band that ISED proposes to auction in areas all across Canada, including the North.

The government’s stated objectives for the licenses is to foster innovation and competition, including in rural areas.

Other licenses for sale include those within the 2300MHz band and 1910-1915/1990-1995 MHz (PCS) band.

Qualified bidders will have until May 15th to send in sealed bids and the government will announce the winners on May 18th.

Source: ISED 

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