Wireless Spectrum Auction Winding Down

The Canadian Advanced Wireless Spectrum Auction, which commenced on May 27, is finally winding down. In its final stages, there's no surprise that current national providers Rogers, Telus, and Bell lead the bidding. But the most enticing part of the auction is the companies that come next in line; one or more of which will become Canada's newest wireless carrier.

This year, Industry Canada set aside a portion of spectrum, which consists of the wireless airwaves required for cellular services to operate, exclusively for new carriers to bid on. This means that there's a guarantee someone new will enter the playing field. In a best case scenario for fostering new competition (and potentially resulting in improved service plan rates for consumers), we'd see a new national carrier. While Bell and Telus compete with one another in the CDMA space (along with Virgin Mobile, which piggybacks on the Bell network and Koodo Mobile, owned by Telus).,Rogers currently has no competitor in the GSM space except it's own sub-brand, Fido.

At last check, a company believed to be Quebec-based Videotron ranked fourth in the bidding process, followed by Toronto, ON-based Globalive Communications Corp., which owns the Yak Communications brand, Shaw Communications, and DAVE Wireless (Data & Audio-Visual Enterprises Wireless), a venture that includes John Bitove, formerly of XM Canada and Vulcan Capital, an organization founded by Paul G. Allen, co-founder of Microsoft.

At the onset of the auction, Globalive announced its intentions to become Canada's "fourth national wireless carrier". The company backed up that claim with a $235 million dollar deposit into the auction. Ranking right behind Videotron in the current status, Globalive has continued to show that the company means business, and indeed looks like a likely candidate to enter the market.

While the auction is set to close shortly, it's important to note that changes in the Canadian wireless landscape won't be as quick-to-action as the auction itself has been. It will likely be a year (or even two!) before a new national carrier (and/or regional ones) set up shop. What we can look forward to in the immediate future, however, is existing carriers re-thinking their current strategies to gear up for the inevitable competition. We've already seen evidence of this with both Bell and Telus recently emphasizing unlimited data plan offerings; an area where Canada has long been said to have fallen behind in comparison to other developed countries.

Meanwhile, Rogers Wireless has been taking a lot of flak because of perceived high data rates and failure to offer unlimited data plans. The spotlight has been shone even more on the GSM carrier as of late because of the upcoming release of the widely popular 3G iPhone. Any customer that wants to buy the highly coveted device will also have to sign on for a three-year term. While this has peeved many consumers to the point of a growing and widely publicized online petition, it just goes to show that Rogers is certainly thinking ahead. If the carrier ensures that customers are secured with its services for the next few years despite who or what might show its face in Canada in the next year or two, then it can buy a lot of time to examine possible plan options going forward. Stay tuned.