Majority of wireless spectrum in next auction to be set aside for small firms

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TORONTO (NEWS1130) – The federal government will set aside a majority of the spectrum available in a new wireless auction next year for Canada’s smaller players or other new firms in a bid to increase competition, says Industry Minister James Moore.

The AWS-3 spectrum auction, which hadn’t been expected to be held until later, will be in addition to the auction of 2,500 megahertz spectrum that’s already scheduled for April 2015.

Moore said that by holding the AWS-3 auction early, investors will have more certainty and he hoped would be more willing to fund competition in Canada’s wireless sector.

Ottawa took in $5.27 billion earlier this year in the sale of the 700 MHz spectrum, a much sought after portion of the airwaves used by wireless networks used to transmit information.

“The rules for this auction, consistent with the ones for the 700 MHz and 2500 MHz auctions, will encourage more competition in the wireless market while ensuring the interest of consumers first,” says Moore.

He adds that 30 MHz of the 50 MHz of AWS-3 spectrum will be available exclusively to operating new entrants when it goes up for sale next year.

“This set-aside represents over half of the AWS-3 spectrum being made available and is the largest single block every reserved for new entrants in Canada,” he adds.

Canada’s three biggest wireless carriers account for the vast majority of the country’s wireless market, with a only small portion occupied by companies that emerged after a 2008 auction of wireless spectrum, which also set aside significant portions for new entrants.

One of the bidders in the 2008 auction, operating as Mobilicity, is currently operating under court protection from creditors and another, Public Mobile, has been purchased by Telus, but other carriers have carved out small portions of the market.

Wind Mobile, which operates in Ontario, Alberta and British Columbia, has said it’s open to joining forces with other new entrants to compete but says it has had difficulty finding financial backers.

Quebecor’s Videotron (TSX:QBR.B) has indicated it wants to expand beyond Quebec if the conditions are right.

Moore said that he is confident that more investors will emerge for the new auction, but said his officials haven’t been in talks with any of the companies about the new spectrum auction.

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