WIND Mobile pulls out of 700Mhz spectrum auction due to lack of funding

WIND Mobile’s parent company, Globalive, has pulled out of the 700Mhz spectrum auction, set to begin tomorrow.

The company reportedly couldn’t find the financial backing for the project, as its Russian-owned parent company pulled the necessary funds to invest. The new entrant requires additional spectrum if it plans to make further inroads into the Canadian smartphone market. WIND Mobile has just under 650,000 customers across Canada, mainly in southern Ontario, Vancouver and parts of Alberta, and was to have used the spectrum to roll out an LTE network.

Already available across the United States, the 700Mhz band is widely thought to be the “beachfront property” of wireless, as it is easily able to penetrate thick walls and travel further with less distortion and signal degradation.

With Mobilicity’s parent also out of the running, the announcement leaves the Big Three, Rogers, TELUS and Bell, to each pick and choose a prime paired block in regions that are not challenged by regional carriers like SaskTel, Eastlink, MTS and Videotron. Each incumbent is limited to buying one prime paired block of spectrum in the auction, which is expected to raise over $1 billion for the government.

WIND Mobile’s absence from the auction also puts into jeopardy the government’s attempt to ensure a viable fourth competitor in all markets across Canada. Though WIND will continue to operate as normal, and may begin refarming some of its existing spectrum to support LTE in urban areas, parts of Ontario, British Columbia and Alberta may only attract three bidders, leaving at least one unpaired block unpurchased.

If there are remaining prime blocks of spectrum that go unpurchased, the government states that they will make “unassigned licences available for licensing through an alternative process, which could include a subsequent auction at a later date,” which may include additional public consultation.

Mark Goldberg, a Thornhill-based telecom consultant and founder of the Canadian Telecom Summit, said that this situation is “an unfortunate outcome of a wireless policy where the rules are changing too frequently and are leading to an unstable investment climate.” The government has previously blocked spectrum transfer deals, including a $380 million bid by TELUS for Mobilicity, and has fostered an environment where foreign entities like US-based Verizon, chose not to get involved.

It is business as usual at Wind – we do need more spectrum so I am not happy we had to withdraw from 700 but onwards and upwards for here!

— Tony Lacavera (@TonyLacavera) January 13, 2014

WIND Mobile’s Chairman & CEO, Tony Lacavera, was disappointed by the need to drop out, but says it’s “onwards and upwards [from] here!”
[source]Industry Canada[/source]