November 18, 2011 9:11 am
There’s a great deal of pressure on Christian Paradis these days. In May he took over from Tony Clement and was appointed the Minister of Industry, formally he was the Minister of Natural Resources, and now he’s found himself in the middle of the most important wireless topic in years. The 700MHz band is incredibly critical to the future of Canadian telecommunications – some experts call this the “beachfront property”, or “Cadillac” of spectrum and will efficiently help roll out Long Term Evolution (LTE) networks in Canada. The 700MHz is cheaper for carriers to deploy and can easily reach remote areas (with less sites), plus has the ability to penetrate through thick walls in buildings, thus reducing dead spots.
From a government perspective, they want to rake in as much cash as they can. In 2008, after 331 rounds of bidding, the government successfully sold 292 licences for $4,254,710,327. At the time analysts were predicting the auction would raise $2 billion, but became heated when a spectrum “set-aside” was announced for new entrants, such as WIND Mobile, Mobilicity, Videotron and Public Mobile. The goal was “to achieve lower prices, better service and more choice for consumers and business”.
Over the past few years prices have fallen, both in handsets and monthly rate plans. Subscriber number have increased across the board – Canada now has approximately 25 million wireless subscribers. The leader is Rogers with 9,288,000 wireless customers, Bell has 7,369,596, and TELUS has 7.2 million. Our “new” entrants, WIND Mobile has 358,000 subscribers, Public has over 150,000, and Mobilicity hasn’t made their subs known.
Our Canadian carriers all want in on the upcoming 700MHz auction, the Big 3 have said they want an open auction with no set-asides. George Cope, President and CEO of Bell, said that an “open auction ensures roll-out of rural and urban LTE”. In addition, Rob Bruce, President, Communications for Rogers, stated that putting any “Restrictions on the 700 MHz band auction would be unfair to our nine million wireless customers who have every right to access a truly national, robust LTE network in both urban and rural markets”.
Our new entrants clearly don’t want to be left out of LTE and passionately want a set-aside. Mobilicity and WIND have been the most outspoken on this issue. John Bitove, Mobilicity Chairman, recently said that “For years, Canada’s Big Three ‘tri-opoly’ have been acting like squirrels preparing for a 50-year winter. They hoard spectrum to keep others from giving consumers an affordable choice and Canadians have been paying the price for their self-serving interests for far too long”. Meanwhile, Naguib Sawiris, WIND Mobile’s financial backer, who has $500 million to invest in the 700MHz says “Our position is clear: if they don’t set aside, we won’t bid for it — why would we go in and just increase the price so the government makes more money and we get devastated”. Paradis said that he hopes to make a decision on the 700 MHz spectrum auction structure “before the end of the year”.
We’ve heard both sides of the story. The government will auction off spectrum to make money. All the carriers are in business to bring on subscribers and make money… but what about us consumers, the people who will actually be using the spectrum? What do we want? “Open and fair”, or a “set-aside” for the newer carriers? Have your say below… it’ll be open until November 30th.