Canada Spectrum Sale Nets Government $4.76 Billion
The Canadian government raised C$5.27 billion ($4.76 billion) from its auction of 700-megahertz spectrum as Rogers Communications Inc. (RCI/B) paid heavily to secure new airwaves and Quebecor Inc. (QBR/B) spent more to get a foothold outside its home market.
Rogers, the country’s largest carrier, spent C$3.29 billion for 22 licenses in the auction that began Jan. 14, the government said. Telus Corp. (T) and BCE Inc. (BCE), Canada’s two other major carriers, spent C$1.14 billion for 30 licenses and C$566 million for 31 licenses respectively. Quebecor Inc. was the next largest bidder, spending C$233 million through its Videotron unit.
The government had limited bidding by Rogers, Telus and BCE, who together control 90 percent of Canada’s wireless market, to encourage new entrants and smaller players to participate and foster its goal of having four carriers in each region of the country. Videotron, based in Montreal, added spectrum in Quebec, Ontario, Alberta and British Columbia, which Industry Minister James Moore said is evidence the government’s plan is working.
“They have the capacity to be, and I think that they will be,” Canada’s fourth national carrier, Moore told reporters today in Ottawa.
“With the high-quality frequencies acquired in this auction, Videotron is now well-equipped to develop its network in the years to come,” Robert Depatie, chief executive officer of Quebecor, said in a statement.
Observers had predicted a smaller windfall for the government after foreign bidders pulled out. New York-based Verizon Communications Inc. (VZ) said in September it wouldn’t join the auction after expressing interest earlier. Wind Mobile, Canada’s largest new operator, pulled out after its backer, Amsterdam-based VimpelCom Ltd. (VIP), decided not to fund its bid.
The results came near the middle of the range of C$3.4 billion to C$5.7 billion estimated by Dvai Ghose, an analyst at Canaccord Genuity Inc. in Toronto.
The last auction in 2008 netted the government C$4.25 billion, almost triple analysts’ predictions, with the big three carriers accounting for 62 percent of the spending. This year’s auction is for 700-megahertz airwaves, particularly sought after for their ability to transmit data through buildings in densely packed cities.
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