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.

Why Can't We Just Buy Phones Direct?

The ongoing debate about how Canadians pay too much for mobile phone data services, how we lack competition, and how we always get locked into long-term contracts, has begun to heat up again with the upcoming launch of the iPhone next month. A CBC News report just pointed out that, while customers of the 3G iPhone in Australia will be able to buy the phone outright and carriers like AT&T in the U.S. ask customers to sign-up for a two-year agreement, Canada's Rogers Wireless is requiring that you purchase a lengthy three-year plan if you want the highly coveted device.

From a business perspective, the reasons for this decision are obvious. Why not? There is currently no competition in the GSM arena in Canada, and, with the wireless spectrum that's currently underway, there just might be in the near future. We recently employed number portability in Canada, which lets a wireless customer take his number and port it to a new carrier, should he so desire. Of course, if you're locked into a contract when a more desirable carrier pops up, you're out of luck. You have to either wait for that contract to finish, or pay through the nose to cancel it early. Naturally, anyone I know who wants an iPhone is gritting their teeth at this news, and actually considering foregoing the device based solely on principle. Why should they have to lock in for three years, the longest term reported anywhere in the world thus far, if they want it?

What would make things so much easier would be to simply start selling mobile phones directly to consumers. Sure, their sale prices would no longer be subsidized by the wireless carriers, but customers would be 100% untethered, able to purchase whatever data plan and options best suit their needs from their desired wireless carrier. Contracts are contracts, and if they are still to be offered, than so be it. But carriers should not be able to essentially hold a mobile device ransom in order to tie a customer to their services for a set period of time. I can't think of any other media and entertainment offering that works in such a manner.

I've long talked about a day when we'd actually buy the SIM card itself outright, load it up with desired options and features, and slap it into any mobile phone we like. We're a long way from that sort of open source landscape, but it really would be the most ideal option for the customer. Not only would it have the potential to improve customer service on the provider side, but it would also make it much easier (and likely!) for more people to get involved with the latest and greatest mobile phone options; and even to purchase that brand-spanking new phone as a gift for a loved one.

Is the iPhone Coming to Canada or Not? - UPDATE!

I think I'm asked this question more than I'm asked how I'm doing today, or what I'd like to eat for lunch. OK, maybe I'm exaggerating a bit, but I do find myself in the middle of a discussion about the iPhone, and "hey, when the heck are we going to see it in Canada?" at least once every few days. For the most part, it's others asking me and not the other way around. I really could care less (yes, I'm serious). But clearly I'm the exception to the rule in this case. So when is the holy-grail-of-phones, the iPhone, coming to Canada?

As of late, there has been another swarm of rumours that Rogers (the only GSM provider in Canada) and Apple are working out the terms of a deal. The Toronto Star even claims that it could be here between May and July. Of course, the paper doesn't cite its "industry sources", and is quick to note that there have been no official confirmation from either side. I can't seem to get one either. A Rogers spokesperson simply told me that there "is nothing new to report on the iPhone." As Chandler from Friends would say, "Can you BE any more vague?"

I recall similar rumours having been stirred up a few months ago, so it could just be someone, somewhere trying to rock the boat again and get the Canucks all excited. My instinct tells me that we won't see the iPhone here until after the Advanced Wireless Spectrum Auction at the end of May, which is when carriers bid for additional spectrum to enhance their services, and new entrants can bid to start their own service. Why do I say this?

1) With Rogers being the only main GSM carrier, there's no rush to bring the iPhone here since no one else can swoop in and carry the phone under Rogers' nose!

2) Data plan pricing in Canada is significantly higher than in the U.S. To my knowledge, Rogers does not offer any unlimited data plans. This means that data-intensive users will either have to pay through the nose to use the iPhone, or continually monitor and limit their on-the-go usage so as not to incur hefty additional fees.

3) Apple likes to play to the tune of its own song, and I get the feeling that Rogers is the same way. The Toronto Star report claims that Apple takes a portion of customer's bills as part of its agreement with carriers. If this is indeed true, Rogers is probably not too keen on that idea. And trying to agree on a deal will be tough with two strong-headed, powerful forces, neither of which wants to let up on its terms.

But then again, the AWS Auction could very well be a reason why we might see the iPhone in Canada before the end of the year. Here's why:

1) There will almost certainly be a new wireless carrier in Canada after this Auction, who will very likely be ready to set up shop by 2009. (Industry Canada has decided to set up a portion of the spectrum exclusively for a new carrier). Knowing this, Rogers might bite the bullet to smooth out a deal with Apple before competition heats up.

2) Canadian born and bred Research in Motion (RIM), makers of the popular BlackBerry device, reportedly has some cool devices on the horizon, and the longer we become used to the BlackBerry model, the more residents will hold it as the standard. People will only wait so long before they upgrade to a new phone! And once it's done, they won't too easily fork over another $400 for an iPhone.

3) People are quite obviously (and vocally) becoming frustrated that it's been almost a year since the iPhone debuted in the U.S., and yet we still haven't seen it north of the border.

4) "Grey" market iPhones that have been unlocked and cracked are widely being used across Canada on the Rogers network already. The longer it takes for the device to arrive her legitimately, the more it will become available illegitimately (although I'd argue that a huge percentage of those who have it illegitimately would have obtained it that way to begin with).

So what's the bottom line? Hurry up already so I can go back to using my regular, Sony Ericsson camera phone in peace.

UPDATE: One day later, and we have our answer. Rogers finally issued a statement confirming that it WILL be bringing the iPhone to Canada "later this year". Read all about it on our sister Website at http://www.marketnews.ca/.