Ottawa Spectrum Auction Aims to Increase Competition

by Istvan Fekete on July 8, 2014

Industry Minister James Moore announced yesterday that Ottawa plans to auction AWS-3 spectrum early next year. The good news for new entrants is that the government will set aside more than half of these valuable wavelengths specifically for wireless startups.

What this means is that new entrants such as Wind Mobile, Mobilicity, etc. will have the opportunity to expand their networks at much lower cost, because they won’t have to bid against the big three, which, as you may have already seen, dominated the 700 MHz spectrum auction that took place earlier this year.

The announcement has received both criticism and plaudits. It’s a no-brainer that criticism would come from the incumbents’ side, claiming that this is Ottawa’s attempt to artificially adjust the market to promote government policy and a favoured group of wireless players: “We welcome competition, but all competitors new or old should follow the same rules. Spectrum is a valuable national resource and shouldn’t be given to selected companies at a bargain. It’s a cost to taxpayers,” said Bell Canada spokesman Mark Langton.

Wind Mobile, on the other hand, has issued a statement with regards to yesterday’s announcement, saying this is a great move to increase competition. “Today’s announcement is proof that the Federal Government is taking significant and important steps in encouraging more competition, more choice and more value in the Canadian wireless industry, and I applaud Minister James Moore for his positive efforts,” said Anthony Lacavera, Chairman and CEO, WIND Mobile.

“Canadians are paying too much for wireless services that lag behind the rest of the world – and only increased competition will improve that. Competitive alternatives like WIND Mobile need additional spectrum to grow and flourish. Decisions like the one announced today recognize that the Canadian wireless industry is maturing and demonstrate that the Government is determined to see that the demands of Canadian consumers are addressed.”

The AWS-3 spectrum is valuable for Wind Mobile, because Anthony Lacavera has voiced the carrier’s need for more spectrum, which equates to growth. It is worth noting here that the AWS-3 spectrum is close to the AWS spectrum auctioned off in 2008, and it is perfect for Wind Mobile to deploy its 4G LTE network in the areas it already operates.

Both the PIAC (the Public Interest Advocacy Centre) and the CAC (the Consumer’s Association of Canada) support the AWS-3 spectrum auction and applauded the government’s move to set aside spectrum for new entrants, encouraging a fourth wireless payer.

The set-aside spectrum is for wireless startups with up to 10% national and 20% provincial or territorial market share. Wind Mobile, Videotron, and Mobilicity fit into this category.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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