Canadian telecom veteran may be backing behind U.S.-based Sprint bid for spectrum

Industry Canada has released documents disclosing Sprint Corp as the Nova Scotia-numbered company bidding for scarce mobile spectrum in January’s auction. And according to analysts, it’s likely telecom veteran Mike Kedar will provide the Canadian backing the U.S. giant will need to comply with Canada’s foreign ownership restrictions. Kedar says he isn’t able to confirm or deny his participation with Sprint, citing legal restrictions in the government’s auction policy that prevent new players from entering the process after the application deadline. Applicants & eligibility points3050443 Nova Scotia Co – 630 Two licences in all markets, a third in southern Ontario and no licences in NF, Nor. Quebec, Nor. Ontario and YK Bell Mobility – 684 Two licences in all markets, third in Western provinces, NF, Nor. Quebec and YK Microcell Telecommunications – 586Two licences in all markets Rogers Wireless –586Two licences in all markets Telus Communications – 266One licence in West, Maritimes, North; multiple in Ontario/Quebec Thunder Bay Telephone – 10One licence in Northern Ontario W2N – 586Two licences in all markets "This is a very delicate situation," Kedar told Report on Wireless. "There’s a lot of anti-collusion and all kinds of provisions in the (auction) policy for preventing people from talking to other people. So I’m very careful. All I can say is that Mobilexchange and Mike Kedar are very much involved in this." Despite the fact that his company is conspicuously absent from the list of registered bidders and any related ownership documents – released by Industry Canada Nov. 17 – industry sources assume Kedar is involved with Sprint at some level. Jeremy Depow, senior analyst at the Yankee Group in Canada, says given Kedar’s past ties to Sprint, and his stated intent to participate in the auction, it’s a logical conclusion to draw. In 1986, Kedar founded Call-Net Enterprises, which later gained the rights to the Sprint brand in Canada. He also co-founded Microcell Telecommunications Inc, but is no longer involved with either company. "He’s expressed interest in this auction on a pretty consistent basis," says Depow. "It would really surprise me if he wasn’t involved somewhat." Kedar was initially wary about participating in the auction and criticized the department for not setting aside spectrum for new entrants (RoW, July 10/00). His sentiments may have changed, as did those of other new entrants, when more spectrum became available a result of Telus’ acquisition of Clearnet Communications Inc (RoW, Sept 5/00). Room for another player Sprint is one of seven companies that has registered its intent to participate in the auction. Collectively, the companies have anted up $641.1 million in deposits on a total of 3,348 eligibility points. The companies participating in the auction, subject to their qualification by Industry Canada, are: Bell Mobility Inc, Microcell, Rogers Wireless Inc, Telus Communications Inc, Thunder Bay Telephone, W2N Inc and 3050443 Nova Scotia Co. The four incumbents are expected to win their bid for additional spectrum, leaving enough for at least one new regional player. The Telus acquisition of Clearnet gave the western-based telco a surplus of spectrum which had to be given back to the department. As a result, six additional licences – two in each of Alberta, British Columbia and Quebec (RoW, Sept. 5/00) – for a total of 62 licences are up for grabs. Depow speculates that Sprint could buy spectrum in the bigger cities to get started, but he doubts the Canadian market could sustain five national wireless companies for long. "I think we’re going to see four (players) again, but maybe for a short period we’re going to see five," he contends. "I think one may get eaten after a while." Sprint has deep pockets and could bid aggressively in Central Canada, blocking Telus’ bid to get more than one licence in the lucrative and highly populated region. A possible bidding scenario for the U.S. telco, based on its eligibility points, is two licences everywhere, except in Newfoundland, Northern Quebec, Northern Ontario and the Yukon. The company may also try to get a third licence in Southern Ontario. The sixth bidder is W2N, a subsidiary of Wireless2net.com Inc, which is 80 per cent owned by Joe Church and 20 per cent by itemus Inc, a Toronto-based incubator.W2N may not have as big a bidding float as some of the larger players, but its principal is an experienced applicant who won spectrum in the 24/38 GHz auction last fall. Church also participated in the 1995 comparative review for PCS spectrum with LanSer Telecom Inc, but was unsuccessful (CCR, Feb 22/95). The seventh applicant, Thunder Bay Telephone, will bid on one licence and judging by its eligibility points and its current serving area, Northern Ontario seems the obvious target. The telco is already reselling cellular services and securing PCS licences would enable it to offer a facilities-based service.

Canadian telecom veteran may be backing behind U.S.-based Sprint bid for spectrum

News | November 27, 2000

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