Ottawa brought in $2.16-billion in a recent spectrum auction, less than a third of the proceeds from the previous auction for similar mid-range spectrum. In total, 4,099 licences were awarded to 20 bidders.Kai Pfaffenbach/Reuters
A federal auction for 5G wireless licences has netted $2.16-billion for Ottawa, less than a third of the proceeds from the previous auction for similar mid-range spectrum.
Telus Corp. T-T shelled out the most, spending $619.6-million, while BCE Inc.’s BCE-T Bell Mobility spent $518-million and Rogers Communications Inc. RCI-B-T paid $474.8-million.
The wireless licences are for exclusive rights to airwaves in specific geographic areas in the 3800 MHz range of the electromagnetic spectrum, which are key bands for 5G services because they are able to carry larger volumes of data over long distances. Spectrum refers to the airwaves used to transmit wireless signals.
In total, 4,099 licences were awarded to 20 bidders after 98 rounds of bidding that occurred over the course of 21 days.
Quebecor Inc.’s QBR-B-T Videotron Ltd., which has been expanding beyond its home province of Quebec since acquiring Shaw Communications Inc.’s Freedom Mobile, spent $298.9-million, buying up 305 licences in multiple provinces including Ontario, Quebec, British Columbia and Alberta.
Cogeco Communications Inc. CCA-T, which has been looking to launch a wireless business under the new wireless wholesale regime, spent $190.3-million on 99 licences, including in the Greater Toronto, Montreal and Ottawa regions.
“This 5G ready spectrum investment, obtained at a very advantageous price of $0.27 per MHz-POP, enables Cogeco to pursue its plans for mobile wireless entry in a financially disciplined manner in our markets across Canada‚” Cogeco’s president and chief executive officer Philippe Jetté said in a statement.
(A key measurement of spectrum prices is per “megahertz-pop” (MHz/POP), which refers to the price paid relative to a megahertz of bandwidth for each person in the area a licence covers.)
“We are preparing to launch mobile operations throughout our Canadian footprint by using the recent [wireless wholesale] regime established by the CRTC. It goes without saying that the latter is contingent on obtaining, through negotiations or arbitration, satisfactory rates for wholesale access to the networks of the major players,” Mr. Jetté added.
Scotiabank BNS-T analyst Maher Yaghi said in a recent research note that he had expected the incumbent telecoms to spend between $1-billion and $1.6-billion each in the auction.
The previous auction for 5G airwaves, which were in the 3500 MHz range, occurred in 2021 and brought in a record-setting $8.91-billion for the federal government, with the Big Three telecoms shelling out a combined $7.35-billion.
Unlike the previous auction, which set aside spectrum for smaller regional carriers, the most recent auction capped the amount of spectrum that companies could acquire.
Federal Industry Minister François-Philippe Champagne said the auction results “will build on our government’s ongoing efforts to improve the quality, coverage and competitiveness of telecom services in every region of Canada while ensuring Canadians can benefit from the latest wireless technologies.”
Bell said it paid $0.29 per MHz/POP and acquired 939 licences, while Rogers won 860 licences and paid $0.32 per MHz/POP. Telus snapped up 1,430 licences at an average price of $0.24 per MHz/POP.
In a statement, Telus CEO Darren Entwistle encouraged the government “to continue this balanced approach to spectrum auctions to ensure affordable, fair and expeditious access to this valuable national asset.”