Mark Goldberg

Finding value in the left-overs

There were some surprise results when Innovation, Science and Economic Development Canada released the results of the Residual Spectrum auction last week.

Cogeco Connexions paid a little more than $24M to pick up pockets of spectrum in a variety of Ontario and Quebec communities as well as Victoria, BC for a total coverage of about 5.7M people.

Freedom Mobile picked up spectrum in BC and Alberta, covering about 3M people for $8.6M. Xplornet covered 7.5M people for $8.2M, while TELUS picked up spectrum covering New Brunswick and Northern Ontario, reaching 1.6M people for the bargain price of just $900K.

Iristel picked up spectrum in the Yukon for $100K to cover 35,000 people; Ecotel paid $1.2M to reach 1M people in a variety of northern communities.

How will the spectrum be put to use? Will we see enhanced mobile service or more fixed broadband from some of these service providers? In a report issued early this morning, Scotiabank wonders if Cogeco’s spectrum purchase is “a ploy to get Shaw/Freedom or Quebecor/Videotron to negotiate MVNO deals in Ontario and Quebec.” Scotiabank asks if Cogeco might have more leverage with the larger new entrants if there is a threat of an additional company participating in the 600MHz auction, which would increase spectrum prices.

It is interesting to try to understand some of the spectrum purchases. More discussion material for The Canadian Telecom Summit, taking place in less than 2 weeks in Toronto. Have you registered yet?

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