Canadian telecom and media company Cogeco is opting out of participating in the 600 MHz spectrum auction.
Innovation, Science and Economic Development released the list of participants for the auction of the spectrum licence, a desirable frequency that would allow companies to be able to carry signals over long distances and penetrate buildings.
“Cogeco has elected to not participate in the 600 MHz spectrum auction mainly because the structure of the auction based on large geographic areas makes the acquisition of such spectrum uneconomical for the company,” said Cogeco in a statement to MobileSyrup.
“The decision is consistent with our desire to enter the wireless market in a thoughtful manner.”
ISED’s list of participants includes Bell, Bragg Communications, Freedom Mobile, Iris Technologies, Novus Entertainment, Rogers, Saskatchewan Telecommunications, SSi Micro, TBayTel, Telus, Vidéotron, and Xplornet.
In a press release, Cogeco said that it is focusing on its options to enter the wireless market. In its Q3 2018 earnings call, the company said it plans to deliver more information soon on a potential wireless launch. That focus could be with the emergence of 5G technology, the next iteration of mobile technology.
Scotiabank analyst Jeff Fan said that “there were no unexpected applicants,” and added that Cogeco made “the right decision.”
“This should be positive for [Cogeco] shares because of its heavily discounted valuation and our belief that this was one of the overhangs,” Fan said in a December 7th, 2018 email.
Innovation Minister Navdeep Bains announced in March that his department will be setting aside 43 percent of the spectrum (a total of 30 MHz) for regional wireless operators and potential new entrants in the auction that will take place in March 2019.
“Competition is a key driver of innovative and affordable telecommunications services,” Bains said in a statement to the press at the time.
“This is an important step toward more choices, lower prices and higher quality cell phone services for Canadians. Auctioning 600 MHz spectrum will encourage competition, support new and emerging technologies, and enable Canadians to benefit from high-quality services at a better price.”
Setting aside spectrum for smaller players was done so smaller players like Shaw’s Freedom Mobile and Quebecor’s Vidéotron would be able to compete for spectrum without having to go up against national incumbents Bell, Telus and Rogers.
Shaw, however, feels the amount should be bumped up from 30MHz to 40MHz, but Canada’s Big Three carriers have come out against setting aside spectrum for new competitors like Shaw and Vidéotron.