Over the last several months carriers have been pounding the pavement to sway the government into making a decision on the upcoming 700 MHz spectrum auction. Various carriers, plus advocacy groups, have set up consumer petitions, created cartoons and sent out press releases about how the auction should be structured – “fair and open”, to have a set-aside or a cap in place. All this talk by the carriers is apparently in the “best interests” of Canadians. However, Christian Paradis, Canada’s Minister of Industry, said that “this is not a decision that I nor this government will be taking lightly”.
Today in a note to his clients, analyst Jeff Fan of Scotia Capital, stated that his sources are still hearing mixed dates of when the auction will be announced. “Some are speculating that it will be before the federal budget (which is scheduled for March 29), some are speculating it will be part of the budget, while some believe it will be after the budget”. It’s been rumoured that the auction will take place later this year or early 2013.
Reading over the report gives a good insight into how much cash the government expects to bring in. Let’s preface this to the auction in 2008 – it was originally estimated to bring in $2 billion, but saw 292 licences sell for $4,254,710,327. Fan believes that the upcoming 700 MHz spectrum will rake in $3,458,000,000.
“Based on the above assumptions, we estimate that the Canadian 700 MHz auction will generate proceeds of approximately $3.5 billion, which would equate to approximately $0.9 billion per incumbent and $0.9 billion for the new entrants combined.”
That’s a pile of dough. Lots on the line here.
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