Government pulls in $8.91 billion in 3500MHz spectrum auction

Innovation, Science and Economic Development Canada (ISED) has published the results of the government’s 3500MHz spectrum auction.

The auction kicked off on June 15th and wrapped up July 23rd — it had initially been delayed due to the COVID-19 pandemic.

In a press release, ISED said that 1,495 of the 1,504 available licenses were awarded to a total of 15 Canadian companies. 23 companies in total participated in the auction. 757 of those licenses went to small and regional providers across the country and in all 172 services areas and there is now at least one small or regional providers holding spectrum to deploy wireless services to Canadians. Further, ISED says that small and regional providers increased their total mobile spectrum holdings by over 50 percent. However, it’s worth noting that the government set aside up to 50MHz for small and regional providers.

The government set the opening bid for all available spectrum at around $590 million. Final auction revenues came to $8.91 billion due to “competitive bidding.” The auction saw 103 rounds of bidding and took place over 25 business days. Winning bidders have until August 13, 2021 to submit 20 percent of their total final payment. The remaining amount is due October 4th, 2021.

“The 3500 MHz auction is a key step in our government’s plan to promote competition in the telecom sector, improve rural connectivity, and ensure Canadians benefit from 5G technologies and services,” said François-Philippe Champagne, minister of innovation, science and industry, in the press release.

“As intended, small and regional providers have gained access to significantly more spectrum, meaning that Canadians can expect better wireless services at more competitive prices, which has never been more important for working, online learning and staying connected with loved ones.”

Finally, it’s worth noting that the 3500MHz spectrum is widely considered crucial for 5G networks in Canada. 3500MHz sits within what’s called mid-band or ‘Sub-6’ 5G. Networks using 3500MHz spectrum should offer faster speeds and lower latency than 4G networks, but won’t perform quite as well as mmWave 5G. That said, mmWave can’t travel nearly as far as Sub-6 5G, making mid-band spectrum critical for covering places outside of major urban centres.

Results including licenses one, amount paid and population covered

• Rogers – 325 licenses – Paid roughly $3.32 billion – 34,955,719 total population covered
• Bell – 271 licenses – Paid roughly $2.05 billion – 34,269,028 total population covered
• Telus – 142 licenses – Paid roughly $1.91 billion – 24,918,405 total population covered
• Vidéotron – 294 – Paid roughly $830 million – 29,968,515 total population covered
• Cogeco – 38 licenses – Paid roughly $295 million – 10,295,549 total population covered
• Xplornet – 263 – Paid roughly $243 million – 16,585,157 total population covered
• SaskTel – 68 licenses – Paid roughly $145 million – 1,094,704 total population covered
• Valley Fiber – 6 licenses – Paid roughly $4.8 million – 174,449 total population covered
• TBayTel – 4 licenses – Paid roughly $1.1 million – 24,918,405 total population covered
• Less than $1 million spent by other carriers

A full breakdown of the provisional auction results can be found here.

It’s worth noting that neither Shaw nor TekSavvy participated in the auction. Shaw decided not to participate in the auction due to the potential Rogers acquisition. TekSavvy, on the other hand, dropped out of the auction following the CRTC’s wholesale rates decision.

TekSavvy’s vice president called the CRTC decision a “tombstone on the grave of telecom competition” and said the company scrapped plans to offer mobile services because of it.

Update 07/30/2021 at 11:30am: You can read carrier reactions to the auction here.

Source: ISED