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Greg MacDonald (Greg MacDonald)
Greg MacDonald (Greg MacDonald)


The end of wireless is nigh - or is it? Add to ...

The wireless spectrum describes the band of radio frequencies used to carry voice and data for wireless communication devices, such as cellphones.

Most countries regulate and manage use of the spectrum, which is considered a public resource. In Canada, telecommunications companies receive licences to use certain frequencies through auctions run by Industry Canada.

But there is a limit to the radio frequencies available for use. It’s a serious issue facing the telecommunications industry, and experts say if it’s not addressed, the problem will lead to more dropped calls and spotty or slow Internet service. It may even hamper Canada’s ability to remain competitive and innovative in business.

“The spectrum is coming under higher demand because wireless data usage is exploding,” explains Greg MacDonald, analyst at Macquarie Securities. “We’re not looking over the edge of the abyss just yet, but if we leave this much longer, we will be.”

Mr. MacDonald joined Macquarie in 2011 to cover the Canadian telecom and media sectors. A highly-ranked analyst, he has more than 20 years’ experience with both global and domestic firms. He has provided top-ranked research coverage through various cycles including upstart telecom companies through the tech bubble, as well as BCE through the largest proposed LBO in capital market history. He earned his MBA from Queen’s University, Kingston.

So what can we expect once our wireless spectrum runs out? Or are companies worrying too much? Greg MacDonald joined us for a live chat to discuss the topic.

Niamh O'Doherty - Hello all, my name is Niamh O'Doherty and I'd like to welcome you all to our live chat with analyst Greg MacDonald. Please feel free to start submitting questions now.


Niamh O'Doherty - Just a quick proviso folks: Greg is a equity/investment analyst, and his area of expertise is how wireless companies make money and what the spectrum crunch implies for the next spectrum auction. So we'll steer clear of anything too highly technical for now.


Niamh O'Doherty - So Greg, perhaps you could give us a quick summary of the issue to start?


[Comment From Greg MacDonald]

Sure. Wireless companies are seeing unprecedented growth in data demand. All of this started with the iPhone and is being accelerated with Android phones being sold at lower and lower price points. Wireless spectrum is necessary to facilitate growth in wireless data - hence the carriers crying for more.


Niamh O'Doherty - And now onto the questions....


[Comment From DRJ ]

Is it critical for the incumbents to have access to all the 700MHz auction, or could they get by with a portion set aside for the new entrants?


[Comment From Greg MacDonald ]

Well, its kind of critical any serious carrier has 700 because the propogation characteristics are very good for data in particular with this are of the spectrum range.


[Comment From Mark ]

What do you think of Shaw's decision not to enter the cell phone market and instead build wireless hubs throughout BC?


[Comment From Greg MacDonald]

Propogation meaning, in building penetration capability and coverage capability - for those liek me who are not technically savy.


[Comment From Greg MacDonald]

My opinion, Shaw will enter mobile wireless at some point. They have announced a Wi-fi network build. Its important to understand that wi-fi can act as a "data offload" strategy in urban markets. Effectively another way of addressing the expected growth in data by taking traffic off the macro network and putting it on a micro network. Therefore, Shaw is building a future network component - likely because it believes there has been too much capacity built by the likes of Mobilicity, Wind, Public mobile


[Comment From ]

What are the alternatives to wireless and what companies are worth watching in this area ?


[Comment From Greg MacDonald]

alternatives to wireless - well, there are free wireless networks at starbucks (again wifi). Wireline is an alternative. Depends on how you want to consume info/entertainment. Do I understand your question correctly?


Niamh O'Doherty - Hmmm. While we wait for clarification on that one, here's another question...


[Comment From WYSIWYG2 ]

Greg, do you think it's in the best interest of a companies long term survival to be as anti-unlimited data plans as Telus currently is? I for one will leave when my contract expires and am already using Mobilicity because of the unlimited data. Do you think the incumbents will see a major exidus of customers because of it?


[Comment From Greg MacDonald]

Companies worth watching. Carriers are large companies by definition because it is a very capital intensive business. Technology companies can be interesting given this theme - I'm not as familiar with tech but think the arms dealers (Ericsson etc)


[Comment From Greg MacDonald]

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