On Monday, I posted the story of Globalive landing its spectrum license and I included a link to the Industry Canada table that shows the current status of the various AWS auction winners.
There are a few blanks in the table and the most noticeable are Shaw and Public Mobile. Strategically, they may be the smartest of the bunch.
Today’s Globe and Mail story about Globalive’s licenses refers to the company as “one of the last bidders to receive clearance.” Everyone has already paid for their bids so you might ask why some might want to delay receiving their licenses.
I ask, “what’s the hurry?”
There are a number of clocks that start ticking from the moment the license gets issued, but none affect the preparatory work, such as negotiating access and building a company. On the other hand, there are good reasons for some to stall the license approval as long as possible.
First off, there is the 10 year license itself. At the end of 10 years, there will be a renewal fee that will be in the millions of dollars per megahertz, based on current rates of more than a $1 per megahertz per pop. Delaying the initial license means stalling that 10-year renewal fee, resulting in savings of millions (if not tens of millions) of dollars. In Globalive’s case, their license fee works out to more than $44M per year. Delays saved them $11M, compared to the effective cost if Globalive had received their licenses in December.
Secondly, there are the roaming and tower sharing rights that run for 5 or 10 years, again calculated from the date of issuance of their license, not the date that the spectrum starts getting used.
For companies that don’t plan to start service immediately, it seems more prudent to delay the issuance of the licenses as long as possible.
The meter is running for all but three licensees. What was the rush for everyone else?
The chief executives for new entrants Public Mobile, DAVE Wireless and Globalive will all be speaking at The 2009 Canadian Telecom Summit in June. Have you booked your seat yet?
Technorati Tags:
AWS, license, Industry Canada