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Industry Canada increased competition for Telesat Canada yesterday when it issued more than half of 12 new licences for satellite airwave spectrum to the market's newest entrant.

Ciel Satellite Communications Inc. has only one satellite in orbit, but it was awarded seven additional licences for satellite spectrum used for new telecommunications, broadband and television services including high-definition (HD) programs.

Telesat, which has seven satellites in orbit and two under construction, scooped up five licences.

The two Ottawa-based companies have told the government they plan to spend several billion dollars launching new satellites. They could be in orbit as early as 2010.

Industry Canada said it was the country's biggest spectrum licensing initiative.

"Canada's government recognizes the need to increase satellite capacity and services in our country," Industry Minister Maxime Bernier said yesterday during a press conference at the 2007 Canadian Telecom Summit in Toronto. He expects a broader range of products and services and a greater choice of suppliers as a result of the new licences.

Satellite operators need new spectrum because the use of bandwidth by their customers, including broadcasters and satellite TV service providers, is growing rapidly. Rural residents, for example, are signing up for high-speed Internet services offered by satellite companies. Increased capacity is also required as more people switch from analog systems to digital TV and HD services offered by satellite and cable companies.

"The result of the licensing initiative will provide the capacity needed to increase and improve broadcasting and telecommunications services to Canadian entrepreneurs and consumers," Mr. Bernier said.

Ottawa kicked off the satellite spectrum process, which picked winners on the basis of their applications instead of by auction, almost a year ago. It had put 29 licences on the block, but only 12 were picked up. Ciel and Telesat will pay fees for the licences. Industry Canada plans to start a new process in a couple of months to issue the 17 other licences, Mr. Bernier said.

Neither Telesat, which owner BCE Inc. has agreed to sell, nor Ciel were available for comment.