Christian Paradis, the Minister for Canadian Industry announced back in March that they are looking to boost the competition in the wireless industry so consumers in Canada would be able to get better services and prices. The Federal Government announced its intentions to “promote at least four wireless providers in every region of the country.” Apart from this the Minister announced other plans too, which include reconsideration of the policy about requests on spectrum transfers in order to encourage a competitive environment. However, the announcement came from Ottawa after Shaw and Rogers declared a $700 million cable deal, which also includes a $50 million option to “have the former acquire the latter’s unused AWS spectrum in 2014,” according to iPhoneinCanada. Some believe that the move avoids a ban that was put into practice by Ottawa to stop incumbents from purchasing spectrum from new wireless companies until 2014.
According to Globe and Mail, Canadian wireless carriers therefore have raised their voice against Ottawa’s recent plans of getting involved in the transfer of spectrum licenses between telecom companies, especially from wireless companies that have recently entered the industry. The telecom carriers have said that new plans by Ottawa could create uncertainty on investments, as a number of companies are gearing up to raise capital in order to bid in the auction of 700MHz that will start in November 2013.
Speaking against the new plans from Ottawa, Mobilicity stated that “wireless competition is on life support” and the capital should give more flexibility to new telecom entrants so they could pay for their future and previous spectrum.
“Mobilicity respectfully submits that the very announcement of this consultation with respect to license transferability a few weeks ago has already further impinged access to capital for new entrants,”
“Ironically, this announcement has created a level of uncertainty and confusion in the minds of investors as to the liquidity of spectrum assets which in particular affects new entrants far more than incumbents and further hampers their ability to create a competitive marketplace – the very thing the Department has suggested it wants to enhance.”
Bell also spoke up against the new plans by the government by saying that, “The Department needs to resist micromanaging the wireless industry in order to address the inaccurate claims by some that the industry is not competitive enough. in its submission. The reality is that Canada has an intensely competitive market in which competitors gain and lose ground in each business cycle.”
WIND Mobile said that Ottawa should to give priority to new telecom entrants in the auction for new spectrum, quoting that “the Canadian market is a highly-concentrated oligopolistic market consisting primarily of the three Incumbents.”
Rogers said that Federal Government should not change the original conditions of the current spectrum licenses:
“It was in part on the basis of these rights that bidders in the AWS auction (as well as other spectrum auctions) valued the spectrum and formulated their bidding strategy. This provision contributed to the $4.2-billion raised in the AWS auction.”
“Changing this key attribute of AWS spectrum involves changing the rights of bidders in that auction after the fact – a change that flies in the face of the principles of contractual certainty that the Department strives to attain in its spectrum auctions.”
“Telus views these proposals as unnecessary,” the carrier said, adding that preliminary assessments were “impractical” since it is not clear at what stage of negotiations companies would be obliged to notify the government of a potential deal.”
Source: iPhoneinCanada
Photo: SmartAir
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