Go to the Globe and Mail homepage

Jump to main navigationJump to main content

A wind mobile store (Sarah Dea/The Globe and Mail/Sarah Dea/The Globe and Mail)
A wind mobile store (Sarah Dea/The Globe and Mail/Sarah Dea/The Globe and Mail)

Gloves are off over wireless airwaves Add to ...

Industry Minister Tony Clement is caught in a tug of war between the big telecom incumbents and smaller players over how to craft the next auction of wireless airwaves, a part of the spectrum so valuable it's been likened to beachfront real estate.

Monday was the deadline for submissions to Industry Canada on how the department should structure the 2012 sale of rights for the 700-megahertz spectrum - the airwaves vacated by broadcasters as they quit analog television for the digital world.

More related to this story

A key question facing Mr. Clement is whether, in the name of increased competition, he should set aside some of the airwave auction for smaller wireless players. That's what Ottawa did in a 2008 spectrum sale that introduced new entrants such as Globalive's Wind Mobile. (The 2008 auction of wireless spectrum raised more than $4-billion for the federal government.)

Established companies such as Telus Corp. and Rogers Communications Inc. argue that Canada has enough wireless competition and there's no need to reserve spectrum for smaller mobile players. "The number of entrants in the market is no longer an issue. There are probably more entrants than the market is going to support," said Michael Hennessy, senior vice-president of regulatory affairs at Telus.

Globalive is pushing a more radical solution. The company, which became a player in Canada's wireless market only after the Conservative government intervened to overturn a CRTC ruling, wants Mr. Clement to set aside the entire 700-MHz auction for new entrants only.

Mr. Clement's decision will have major consequences for the industry as rivals battle to bring even richer wireless service, with faster download times, to Canadians.

Spectrum experts call 700-MHz airwaves "beachfront property" because they're especially desirable in that they can penetrate thick walls and travel long distances.

This spectrum is perfectly suited to an era of explosive growth for smart phones and other mobile devices, such as tablets, that place increasing strain on wireless networks.

The spectrum also offers carriers a cheaper option for providing service in sparsely populated areas such as rural Canada. Because 700-MHz yields a larger coverage area per telecommunications tower, companies can erect fewer than would otherwise be needed.





The 700-MHz spectrum has similar characteristics to the 800-MHz airwaves that Ottawa parceled out to cellphone companies in the early 1980s. That's why Globalive wants the 700-MHz auction to be reserved for companies that don't already possess 800-MHz spectrum licences.

Globalive chairman Anthony Lacavera, citing a new study by telecom consultancy SeaBoard Group, said established carriers in Canada already possess far more spectrum than any wireless players around the globe. "These incumbents have these vast spectrum holdings across all of the mobile frequencies … and they have a lot of 800 megahertz."

Globalive argues the national market is still highly concentrated in the hands of three incumbents: BCE Inc., Rogers and Telus. "Many, if not most, provinces continue to be dominated by one or two players. Wind [Mobile]estimates that the new entrants together account for only about 1.9 per cent of the Canadian marketplace, measured by subscriber numbers," Mr. Lacavera said.

Ken Engelhart, senior vice-president of regulatory affairs at Rogers, disagrees. He said there's plenty of competition now, noting that in most major centres there are now three incumbent wireless carriers and three newcomers.

"Most countries have three or four wireless carriers. In Canada now we have six, so I don't think anyone could say we don't have enough competition in Canada," Mr. Engelhart said.

In its submission to Industry Canada, Telus says that if Ottawa decides to reserve some of the airwaves for new entrants, cable companies and established provincial carriers such as Manitoba Telecom Services should be prevented from bidding. "These companies are simply not 'new entrants' in any valid sense of the term insofar as the Canadian communications market is concerned," Telus said.

Follow on Twitter: @stevenchase

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories