The auction of spectrum licenses in the 3500 MHz band in Canada raised about CAD $8 billion. As per the results, small and regional providers have increased their spectrum assets by over 50% across the country.
“As intended, small and regional providers have gained access to significantly more spectrum, meaning that Canadians can expect better wireless services at more competitive prices, which has never been more important for working, online learning, and staying connected with loved ones,” said the François-Philippe Champagne, minister of innovation, science, and industry.
The auction mainly aims to improve Canada’s high-quality networks in every part of the country in addition to encouraging competition. In total, 1,495 out of 1,504 available licenses were awarded to 15 Canadian companies, including 757 licenses to small and regional providers. As a result, in over 170 service areas, there is now at least one provider holding spectrum to deploy new services.
With Canada recording steep tariffs in connectivity, the government is on the move to drive the costs down by encouraging competition among operators. Yet, even if small and regional telecom companies are given opportunities, they certainly have a long way to go to successfully rival leading operators.
In fact, the big three Canadian mobile operators – Bell, Rogers, and Telus – together accounted for CAD $7.3 billion or over 82% of the total auction spend. Preliminary results showed that Rogers spent CAD $3.3 billion, Bell spent CAD $2.1 billion, and Telus spent CAD $1.9 billion.
“This investment in 5G spectrum will build on our existing 5G assets and enable us to deliver the world-class connectivity Canada needs to increase productivity, fuel innovation, create jobs, and compete in a global economy for decades to come,” said Joe Natale, president and CEO at Rogers Communications. “We went into this auction with a clear plan and acquired the spectrum we need to continue driving the largest and most reliable 5G network in Canada and to deliver long-term value for our customers, shareholders, and Canada.”
"With our strong 3500 MHz spectrum position, we're ready to take the country's top-ranked 5G service even further, leveraging the full capabilities of the technology to help bridge the digital divide with enhanced broadband access for more rural and remote communities," said Stephen Howe, Bell's chief technology officer. "The speed and capacity of 5G, coupled with Bell's unparalleled fiber backhaul infrastructure and rapidly expanding network footprints, offers infinite service possibilities for consumers and business users, from augmented reality and machine learning to smart homes, vehicles, and cities, and we're eager to deliver these benefits to Canadians no matter where they may live."
Darren Entwistle, TELUS president and CEO, also commented, “Indeed, by securing spectrum critical to bring transformational, next-generation, 5G connectivity to Canadians, TELUS is able to continue to offer the globally leading network speed, coverage, and reliability our fellow citizens need to realize improved outcomes in our digital world. Importantly, TELUS’ wireless network being the fastest on a global basis truly matters as it drives the innovation that enables the diversity and competitiveness of our country’s private sector, supporting economic growth and job creation for our nation. It also matters because it helps us answer society’s most pressing social challenges in health, education, food security, and climate change while improving economic equality for the benefit of all Canadians.”
Despite the positive outlook of the big three, TELUS pointed out that Canadian national carriers paid more than 2.8 times as much, at $3.28 per MHz-pop, in the recent auction compared to the one conducted in the US.
By and large, the spectrum auction hits the objective of more competition, better coverage, and faster deployment of 5G. Moreover, the latest data show that prices for 2-6 GB plans have decreased by between 9% and 25% compared to the benchmark prices collected in early 2020.
The government persists to further increase competition in the marketplace to bring reliable and affordable services to end-users. As Canada attempts to push the telecom competition forward, only time will tell if operators will respond accordingly as per their expectations. It is yet to be guaranteed that as more players get access to service deployments, the more benefits it will be for society at large.
