Canada's 5G auction raises C$8.9 billion

30 July 2021 | Melanie Mingas

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Canada has closed its spectrum auction for the 3500 MHz band, raising C$8.9 billion (US$7.2 billion), 80% of which came from its three biggest telcos.

Preliminary data showed that BCE Inc spent C$2.1 billion, Rogers $3.3 billion and Telus Corp $1.95 billion.

The auction opened on 15 June and closed after eight days and 103 rounds of bidding and of a total 1,504 available licenses, 1,495 were awarded to 15 Canadian companies, including 757 licenses to small and regional providers.

In total, there were 23 participants.

François-Philippe Champagne, minister of innovation, science and industry, said: “The 3500 MHz auction is a key step in our government’s plan to promote competition in the telecom sector, improve rural connectivity, and ensure Canadians benefit from 5G technologies and

"As intended, small and regional providers have gained access to significantly more spectrum, meaning that Canadians can expect better wireless services at more competitive prices, which has never been more important for working, online learning and staying connected with loved ones.”

In all 172 service areas, there is now at least one small or regional provider holding spectrum for the purpose of deploying new services. The government said the auction increased spectrum holdings of small and regional providers by over 50% across the country.

To help lower prices and enhance competition, the rules of the auction included a set-aside of up to 50 MHz for small and regional providers

The majors

Following the auction, Bell Canada has acquired 271 licences for 678M MHz/POP – which it said is "critical to enabling the full potential of 5G" – for $2.1 billion. Together with existing holdings, Bell now holds 1,690M MHz-POP, or 37% of what has been made available to national wireless carriers. This was acquired at what Bell described as "an industry-leading average blended cost of $1.25 per MHz/POP, in line with Bell's network leadership objectives and the expectations of the financial community".

Bell 5G is ranked as Canada's fastest mobile network and its 5G services are currently available to 35% of the national population. Bell's 5G service launched in major centres across Canada last year and the telco was the first to offer 5G roaming in the US. It has set a target for 70% national coverage by the end of 2021.

Telus took 16.4 MHz of spectrum in the auction for $1.95 billion, bringing its combined national holdings to 25 MHz, averaging 40 MHz in its key markets at an average price of $2.53 per MHz/POP.

In its market announcement, Telus said Canada could create, at minimum, an additional $30 billion of GDP if the country's spectrum policy was aligned with OECD best practices.

With the largest bill, Rogers invested $3.3 billion – which it said is equivalent to $3.38 per MHz/POP – to acquire additional 20-year licences of 3500 MHz spectrum holdings in 169 out of 172 ISED tier 4 regions across Canada, including all key regions, the majority of rural areas, and all urban centres including Toronto, Montreal, Vancouver, Calgary and Ottawa.

Rogers recently announced plans to combine with Shaw to invest $6.5 billion to deliver world-class connectivity across Western Canada, create up to 3,000 jobs, and close the digital divide faster than either company could alone. Together, the two companies will create Canada’s most robust wholly owned national network, delivering more choice and competition for businesses and consumers, as well as realizing the full benefits of next-generation networks for Canadians.