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Canadian spectrum auction brings in the bacon

Up to $3.4bn and rising

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The Canadian spectrum auction has hit twice its estimate of $1.5bn (£700m), and the bidding is raging on as newcomers and incumbents vie for control of the airwaves.

The auction has been running since May 27, and includes 105MHz of spectrum in two 45MHz chunks starting at 1710MHz and 2110MHz as well as some odds and ends nearby, all of which have been broken up into 292 separate lots by frequency and region.

Unlike the UK's Ofcom Canada is imposing lots of conditions on bidders, including service deployment timescales and the reserving of two 20MHz chunks of spectrum for a new entrant or two, just to make sure there's more competition in the Canadian mobile market.

Not only that, but the incumbents (Bell, Rogers and Telus) are going to be forced into roaming agreements with those new operators for at least five years, not to mention having to share their cell sites with the new competition.

Despite those conditions bidding has become frenetic, with the total just knocking $3.4bn Canadian dollars at the end of round 45, and no sign of let up in a process which will only end with the last bidders standing.

The Calgary Sun has been looking at how the bids are dispersed, and reckons alliances are going to be needed if anyone's going to provide a country-wide service.

Telecoms analyst Iain Grant said: "If you look at the country as a jigsaw puzzle ... Some people will have edge pieces, some people will have blue pieces around the lake, others will have key bits of the jigsaw puzzle."

Bidders will have 10 years to make their money back, though they can apply for a renewal towards the end of that period. Canada is planning to use the cash to pay off some of the national debt, so the cost of renewal will probably depend on the size of the debt come 2018. ®

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