Wireless Spectrum Sales Concluded In Canada: Cheaper Services To Come?

The huge CRTC sale of new wireless spectrum concluded on Monday, bringing in about $4.25 billion dollars to the government, and possibly (finally?) putting a dent in the long running Great Canadian Telecom Duopoly of Rogers and Bell.

One of the highest bidders to the new spectrum is Globalive Inc, which is best known for its Yak long distance service.  The company has laid about $442.1 million for licenses in all provinces except Quebec, in an effort to build an all new national wireless provider.  To maintain it’s stranglehold in La belle province, Quebecor Inc.’s Vidéotron paid beaucoup bucks to fend of the newcomers.

Also a big new player: Data & Audio-Visual Enterprises Wireless Inc.  To make things easier, we’ll just call them DAVE (“open the pod bay doors to lower prices, Dave”). DAVE, under the leadership of John Bitove, spent $243.2 million and gained wireless access to 10 of the nations largest cities, in a partnership with Mircosoft co-founder Paul Allen, as well as private investment firm Quadrangle Group LLC.

Mr. Bitove is also well known as the who brought XM Radio to Canada and the Toronto Raptors NBA franchise to the country.

This is definitely good news from a consumer standpoint, don’t think the Great Canadian Telecom Duopoly to take it lying down.  Rogers Communications was the highest overall bidder, shelling out $999.4 million in new licenses while Bell Mobility spent $740.9 million.   Even though I generally forget about the awkward third wheel in the Telecom lovefest, Telus stepped up to the plate by committing $879.9 million of it’s own money.

On the effect of new entrants, the old boys were rather cool in reception.  Robert Bruce, president of Rogers Wireless said “We just don’t see anything new coming along…” and that these new services will be little more than “discount services”.

Bell was similarly nonplussed, but was content to say that “we’ve pretty much got the country covered”, according to Bell senior VP Mirko Bibic.

It’s going to take a while to see what kind of impact the new entrants will have on wireless services in the Great White North, as most estimates say that the newcomers would be able to get their services up and running by next Easter at the earliest.  Let’s just hope that this time, the competition sticks around, as opposed to being absorbed by the telecom overlords, as in the cases of Microcell (Fido) and Clearnet.

There’s nothing worse than the illusion of real competition, only to have the rug pulled out from under you after a few years.

There’s much more detailed coverage at the CBC’s site