Canada to Cap Spectrum Purchases for Largest Telecos

Canada will limit the amount of wireless spectrum that large telecommunications providers such as BCE Inc. can acquire in an auction set to begin Nov. 19, the industry department said.

BCE, Telus Corp., Rogers Communications Inc. and other operators will each be able to buy only one of four blocks of spectrum identified by the industry as most desirable, the department said today in a statement outlining the rules for the auction in the 700-megahertz band.

The Canadian government estimates the sale may raise C$897 million ($870 million) based on the value of the minimum opening bids for the spectrum, according to government documents. It announced plans last year to cap the purchase of spectrum in this way.

The government is seeking to “ensure that Canadian consumers continue to benefit from more choice in the wireless sector and faster wireless speeds at better prices,” Industry Minister Christian Paradis said in the text of a speech distributed to reporters in Ottawa.

The auction format is designed to ensure there are at least four wireless providers in each region of the country, Industry Canada said. The government also said it will require companies to be more lenient in providing roaming on their networks to competitors and sharing cell-phone towers.

The deadline for bids is June 11.

Looser Rules

Paradis told reporters it would be “premature” to say if the government would further loosen restrictions on foreign ownership of telecom operators. Last year, the government relaxed the rules to allow foreign companies to own operators with less than 10 percent market share by revenue.

Desjardins Securities analyst Maher Yaghi said in a research note that he expects each of the incumbent operators to spend about C$600 million acquiring spectrum.

The government should have set aside more airwaves for smaller companies to promote competition and lower prices, Helene LeBlanc, a lawmaker for the New Democratic Party, the biggest federal opposition party, said in an e-mailed statement.

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