AWS-3 Spectrum Auction Kicks Off – Official Results Friday

by Istvan Fekete on March 4, 2015

Canada’s mobile landscape and its competitiveness has been the topic of fierce debate during the past couple years, fuelled by Ottawa’s plan to foster wireless competition across the country. This year is about to bring (at least some kind of) balance: The AWS-3 spectrum auction just kicked off yesterday.

In line with its plans, Ottawa announced that it will set aside 60% of the available spectrum to smaller carriers. However, of the ten qualified bidders, the industry’s eyes are on just two: Wind Mobile and Mobilicity.

You may recall that Mobilicity has been under creditor protection since September 2013, and that the carrier is losing money as we speak. It managed to secure $63 million in financing at the last minute to allow its participation in the auction. The problem, apparently, is that the financially crippled carrier will need to compete against Wind Mobile, as they are both eligible to bid for licences in British Columbia, Alberta, and Ontario.

This is an interesting turn of events, since the two were in talks about a possible merger just before the auction kicked off. The talks broke down because of the auction rules.

For Mobilicity, winning the licences is a must if it wants to maintain its market value – sort of. The owners are hoping for a merger with one of the incumbents, but that’s not going to happen – Industry Minister James Moore has emphasized this plenty of times.

A possible solution would be a merger with Wind Mobile, and they may get government support for this. It would be interesting for Wind to acquire Mobilicity after the auction ends, because it would be able to finalize two deals with one shot: Get airwaves in the targeted areas and 150,000 new subscribers, nearing the 1-million-subscriber milestone.

The only question is: Which is the cheaper solution – to let Mobilicity win licences and acquire it afterwards, or outbid Mobilicity and act like a prince on a white horse by making a low-ball offer for the dying carrier? What is certain, though, is that the government will announce the results this Friday, March 6.

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

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