Canada's spectrum auction raises record $7.2 billion as firms gear for high-speed internet


FILE PHOTO: Hanging cubes display 5G logos at the Mobile World Congress in Barcelona, Spain, February 26, 2019. REUTERS/Sergio Perez/File Photo

OTTAWA (Reuters) -Canada's auction of 3500 MHz spectrum, which is key for next generation 5G networks, generated a record C$8.9 billion ($7.2 billion), with the country's three dominant telecom companies accounting for more than 80% of the amount raised.

Out of 1,504 available licenses, 1,495 were awarded to 15 Canadian companies, including 757 licenses to small and regional providers, Innovation Minister Francois-Philippe Champagne said in a statement on Thursday.

The results would boost competition, he added, a reference to Ottawa's push to open up a market dominated by BCE Inc, Telus Corp and Rogers Communications Inc, known as the big three.

Canadian consumers have complained of steep wireless bills, which are among the highest in the world, and Prime Minister Justin Trudeau's Liberal government has asked operators to cut prices by a quarter by 2021.

Preliminary results showed that BCE Inc spent C$2.1 billion, Rogers C$3.3 billion and Telus Corp C$1.9 billion.

The 3500 MHz range airwaves are key to provide 5G wireless services as they carry larger volumes of data over long distances. They also offer faster upload and download speeds and help power everything from smart cities to driverless cars.

Vidéotron, owned by Quebecor Inc, spent C$830 million to expand its geographic footprint in Canada, buying licenses not just in its native Quebec but also in Ontario, Manitoba, Alberta and British Columbia.

The move indicates that Quebecor plans to become a service provider in those areas, said Mark Goldberg, an industry analyst. He noted that the areas where the company did not bid - Saskatchewan and Atlantic Canada - both have preexisting strong fourth competitors to the big three.

"They're prepared to be the fourth service provider... This is showing pretty close to a billion dollars in investment in spectrum," Goldberg said.

Vidéotron said in a statement that the investment would help the company to "realize its ambition of boosting healthy competition in telecom beyond the borders of Québec."

Bell, Rogers and Telus said their investments will help to provide reliable 5G services.

The auction, initially set to take place in June 2020 and delayed due to the COVID-19 pandemic, closed after eight days and 103 rounds of bidding, the government said.

($1 = 1.2444 Canadian dollars)

(Reporting by David Ljunggren in Ottawa and Moira Warburton in Vancouver; Editing by Diane Craft and Richard Pullin)

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