Vidéotron Emerges as Fourth National Player

by Istvan Fekete on February 20, 2014

The long-awaited results are in: after a five-week-long bidding process that involved 108 bidding rounds, Industry Minister James Moore has announced the winners of the 700 MHz spectrum licences, which has resulted a fourth national player.

As you may have already guessed, the incumbents have won prime licences in all 14 areas of the country. But, in an interesting turn of events, a fourth player has emerged: Vidéotron.

Quebecor (owner of Vidéotron) has spent more than $233 million on prime 700 MHz spectrum in the country’s four most populous provinces. This, however, doesn’t secure its fourth position: as we have seen in the past, it isn’t enough to have spectrum to compete with the Big Three. New entrants need concessions from Ottawa, so Quebecor will likely demand that the government give it secure roaming rights on rivals’ networks and use of their cell towers at low cost.

From this perspective, Ottawa’s push to put a cap on wholesale roaming rates could make sense and foster the much-awaited competition in the country. The provinces Vidéotron can cover thanks to its recent acquisition of spectrum license account for about 80% of Canada’s population, so strategically, the telco is excellently placed to increase its market share.

Quebecor has secured prime blocks of 700 MHz spectrum in Southern Ontario, Eastern Ontario, Alberta, British Columbia, and Québec. Prime blocks are those for which there is technology available to use the spectrum.

“The wireless network Videotron launched in the fall of 2010 already has more than 500,000 customers,” noted Robert Dépatie, President and CEO of Quebecor Media and CEO of Videotron. “With the high-quality frequencies acquired in this auction, Videotron is now well-equipped to develop its network in the years to come and to continue offering its customers the best in wireless technology.”

“Given the way the auction unfolded, Quebecor Media could not pass up the opportunity to invest in licences of such great intrinsic value in the rest of Canada,” said Mr. Dépatie. “We now have a number of options available to us to maximize the value of our investment.”

Rogers, Canada’s No. 1 player has spent the most – $3.3 billion – on prime spectrum in 22 markets, while Telus will shell out $1.1 billion for 30 licences. Bell spent $565 million for 30 licences.

Ottawa is proud to announce that the 700 MHz auction brought the highest return ever: $5.27 billion, compared to the previous AWS auction that brought $4.3 billion to the government.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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