Bell opts out of 600 MHz, Rogers nabs 52 licenses for $1.7B

BCE Inc. was among three prospective applicants who didn’t grab licenses for the coveted 600 MHz spectrum, widely considered to be the last chance to get valuable low-band frequencies. The results of the auction were released late Wednesday afternoon. Among the winners were Rogers Communications Inc., Telus Corp., Shaw Communications Inc., Quebecor Inc., Xplornet Communications Inc., Saskatchewan Telecommunications Holding Corp., Iristel Inc., TBayTel Inc., and Bragg Communications Inc. Innovation Minister Navdeep Bains said in a phone interview he was “very happy with the outcome, because regional providers have more than doubled their share of low-band spectrum, and we wanted to see more competition and more competition particularly with the regional providers.” Rogers won the most licenses with 52 (out of 64 licenses it was able to bid on), spending $1.7 billion for spectrum that covers a population of 35.2 million. Telus followed, spending $931.2 million for 12 licenses covering 19.8 million people. Shaw’s Freedom obtained 11 licenses worth roughly $492 million to cover 21.7 million people. Videotron obtained 10 licenses for $255.8 million to cover 10.2 million people. Iristel nabbed seven licenses valued at $2.5 million for coverage of a population of 633,747. Xplornet and Bragg won four licenses each, and Tbaytel received one license. Bell -- who shares a national wireless network with Telus -- said in a press release late Wednesday that it decided not to buy any 600 MHz spectrum because it doesn’t need it to deliver 4G or 5G services, given it already has sufficient low-band spectrum and “has spectrum assets in the low, mid and high frequency bands in both urban and rural locations.” It noted that similar “to Bell, the company’s main U.S. peers chose not to own any 600 MHz spectrum in their markets.” The release added that the company’s shutdown of its CDMA network allows it to re-farm spectrum, and that its “existing low-band spectrum, combined with network enhancements like cell splitting, enables the company to deliver mobile broadband service for significantly less capital than buying 600 MHz spectrum.” Overall, the results shore up the spectrum holdings of telecoms in the areas where they already operate, with the exception of Iristel, who said it will now be able to expand to Newfoundland. Xplornet, whose Xplore Mobile only operates in Manitoba, also picked up licenses in Atlantic Canada, for Newfoundland and Labrador, Nova Scotia, PEI, and New Brunswick, but a company spokesperson said in an email those East Coast licenses won’t be used to launch mobile service. Rogers’ licenses will cover nearly the entire country: it will capture Newfoundland and Labrador, Nova Scotia, PEI, New Brunswick, North, East and South Quebec and Ontario, Manitoba, Saskatchewan, Alberta, British Columbia, Yukon, Nunavut, and the Northwest Territories. “Combined with future 3500 MHz and millimetre wave spectrum,” the company said in a press release, it is ready to “create a global best-in-class 5G network across Canada.” Iristel president Samer Bishay said in his company’s own release that the spectrum will allow the company to “enhance services in the Territories” and expand to Newfoundland. “The Newfoundland launch of the Iristel Wireless LTE service and 5G readiness is planned for St. John’s in early 2020,” the company said in a release. Telus, which has a network sharing agreement with Bell, will cover east and south Quebec, east Ontario, Saskatchewan, Alberta, and British Columbia. The auction, which netted the government $3.47 billion, was held in March and concluded on April 4. The government dolled out 104 licenses to nine companies in 54 rounds, including 40 licenses to regional providers across the country, a Wednesday release said. The other two participants who walked away with no licenses were B.C. internet and cable provider Novus Entertainment Inc. and Northern ISP SSi Micro Ltd. Innovation Canada said the spectrum can carry signals over long distances and can penetrate structure better than higher-frequency bands, making them better for urban and rural settings. The government said in March last year that it would set aside 43 per cent of the spectrum for regional competitors and potential new entrants. It is a framework that, at the time, wasn’t a surprise to analysts. It initially pitched the idea of set-asides in a proposal in 2017. Analysts said the set-asides would benefit Quebecor and Shaw the most. Freedom’s licenses are concentrated in Eastern and Southern Ontario, as well as in Alberta and British Columbia. Shaw CEO Brad Shaw said in Shaw’s press release that the “addition of this 600 MHz low band spectrum will not only vastly improve our current LTE service but will also serve as a foundational element of our 5G strategy providing innovative and affordable wireless services to Canadians for years to come.” Videotron’s licenses cover North, East and South Quebec and parts of Eastern Ontario. Quebecor said in a press release the new spectrum “will increase its low-frequency portfolio by 300% in most parts of Québec.” The auction for the crucial 600 MHz spectrum represented the last big chance in some time to take hold of low-band frequencies widely considered important for this generation and the next. Innovation Canada released the list of participants in December, which did not include Cogeco Inc., who said the the areas open for bidding were too large for it to compete. The company said it still hopes to launch wireless service at some point in the future. In response to a question about whether the government would implement any changes to upcoming auctions as a result of its experience with the 600 MHz -- like smaller licence areas -- Bains was non-committal. “The 3500 MHz we are going to auction off next year, and we are going to look at some of the lessons of this auction, consult industry and stakeholders as well,” he said. RBC analyst Drew McReynolds said in a Wednesday evening research note that “given the comprehensive spectrum portfolios of the national incumbents, the upcoming 3500 MHz spectrum auction (and future 5G auctions) and potential differences among national incumbents in their approach to 5G architecture and use cases (which we believe remain a work-in-progress), we would not read too much into BCE's surprising lack of 600 MHz spectrum or Rogers' greater than expected cash outlay.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and reporting and editing by Anja Karadeglija at akarad@thewirereport.ca

Bell opts out of 600 MHz, Rogers nabs 52 licenses for $1.7B

News | April 10, 2019

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Bell opts out of 600 MHz, Rogers nabs 52 licenses for $1.7B

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