Talking to the Financial Post, TELUS CEO Daren Entwistle, said that Ottawa’s aim to bring in four wireless companies in the region could cause lot of problems for existing carriers. According to Entwistle, “His primary concern is that if a foreign player with massive resources such as Verizon Communications Inc. takes part in the Canadian auction, it would be treated as a “new entrant” and permitted to bid on up to two out of four prime blocks of spectrum.”
“The Canadian incumbents would be capped at just one block, leaving TELUS, BCE Inc. and Rogers Communications Inc. as well as smaller regional players such as Videotron fighting over the two remaining blocks of spectrum.”
He also said that, “There’s going to be a bloodbath, because people are not going to give up on getting that block. So it’s going to be prohibitively expensive and suck a lot of money out of the industry – money that won’t go to infrastructure and technology, money that won’t go into rural coverage or support lower prices.”
As a result of that spending by incumbents is likely to increase, as none of them would like to miss out on the 700MHz spectrum, which means that they will invest less in infrastructure that would negatively affect monthly prices and threaten wireless coverage in rural areas.
It is noteworthy to mention here that Entwistle also said that it might become really tough to compete against their rivals in such environment because, “The level of bitterness on the competitive front between TELUS, Bell and Rogers makes it very difficult to collaborate unless the circumstances are extremely dire.”
Therefore, all three incumbents want a playing field where they will get equal amount of opportunities. Entwistle suggests that Ottawa should make three changes in its policy to provide a level playing field to all incumbents. One, it should open the auction completely and do not bring purchase caps into play. Second, incumbents like Verizon should be allowed to buy only two blocks of spectrum.
Previously, TELUS got hold of spectrum licenses from Novus Wireless:
“Industry Canada licences dated June 27 show Telus now owns the right to use airwaves in the so-called G-band frequency covering the provinces of Alberta and British Columbia. The government originally sold those licences to Novus Wireless Inc. in the 2008 public spectrum auction.”
Apart from this the Canadian wireless carrier also tried to acquire wireless startup Mobilicity for an amount of $380 million, but unfortunately Ottawa did not approved it.
Source: iPhoneinCanada
Photo: CantechLetter
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