Mark Goldberg


www.mhgoldberg.com






Canada’s 600 MHz auction concludes

Last night, Innovation Minister Bains released the results of Canada’s auction of spectrum in the 600 MHz band. The government released seven paired blocks of 5+5 MHz, 3 pairs of which were set-aside for facilities-based service providers that were not already operating nationally.

600 MHz Licence Winners
Licence Winners # of Licences Won Final Price ($) Total Population Covered $/MHzPop
Bragg 4 13,046,000 1,812,066 $0.360
Freedom 11 491,977,000 21,764,443 $0.783
Iris 7 2,556,000 633,747 $0.342
Rogers 52 1,725,006,000 35,150,715 $1.709
SaskTel 3 12,168,000 1,094,705 $0.371
TBayTel 1 2,802,000 778,449 $0.360
TELUS 12 931,238,000 19,844,765 $2.346
Vidéotron 10 255,780,000 10,225,169 $0.991
Xplornet 4 35,755,000 3,610,258 $0.990

Source: ISED and calculations by Mark H Goldberg & Associates, Inc.

You can find more coverage on the results of the auction on other sites, such as CARTT.ca, but I look to look at these kinds of things from a different angle. All together, the government raised $3.47B which works out to roughly $100 per person in Canada. Scotiabank observed that this was about $600M more than it expected.

Bell did not end up with spectrum from this auction. In its post-auction comments to the media, Bell claimed that it has sufficient sub-gigahertz spectrum, and given that it is shutting down its old CDMA network, there is certainly spectrum available for re-purposing. CARTT.ca quotes Bell’s CTO Stephen Howe saying “Bell looks forward to participating in upcoming federal auctions of the mid band 3500 MHz and high band millimetre wave spectrum that will be required to drive the Fifth Generation of wireless.” This raises an important consideration: antenna sizes, which are proportionate to the wavelengths of the radio spectrum. The wavelength for 600 MHz spectrum is half a meter, 50 cm; the wavelength for 3500 MHz spectrum is about one-sixth that, or 8.5 cm. With the expected increased density of towers needed for 5G, to what extent is antenna size a factor in spectrum deployment?

As I observed last night on Twitter, and as I show in the table above, there is quite a range of prices paid per MHz Pop (calculated by looking at the total price paid divided by the amount of spectrum times the population covered in each license). The opening bid price varied by region (from 13 cents in the far north to 80 cents in more densely populated Southern Ontario and Southern Quebec), but in many cases, the set-aside spectrum was sold for the opening bid price.

Two blocks of set-aside spectrum went unsold in Manitoba and in Northern Ontario, as did one block in each of Newfoundland & Labrador, Yukon, Nunavut, and the Northwest Territories. Xplornet paid about 3 times the opening bid price for its set-aside spectrum, even though its licenses are in regions where the rest of the set-aside spectrum was unsold, or was sold at what appears to be the opening bid level.

How will the auction impact pricing and the level of competition among wireless service providers? What differentiators will emerge? How will the policy makers measure success as an outcome from the sales process? Will any changes be contemplated for the next wave of spectrum to be put up for auction?

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