Canada has started taking a more proactive approach to 5G spectrum allocations, following the trends in the US. This has resulted in several spectrum auctions, the latest of which occurred towards the end of 2023. Over a period of 21 business days, nearly a hundred rounds of bidding saw major telecom companies buy their spots on the 3,800 MHz band.
Why Spectrum Auctions Happen
Canada has hosted several spectrum auctions over the past few years. This is where businesses acquire licenses to operate on the available radio wave frequencies exclusively, allowing them to deliver telecommunication and other wireless services faster and more efficiently than shared spectrum.
If something works without a cable, it requires some spectrum juice to connect to other devices. That includes basic wireless internet, which is vital to online industries. Successful modern businesses market themselves online, especially if they don’t have a physical storefront.
iGaming is an excellent example, as it uses a spectrum to connect users to their sites. Consider, for instance, new online casinos that float promotional offers to prospective players.
Promotions like bonus credits or matched deposits often happen in iGaming and can be key to getting new operations off the ground. The internet is the world’s biggest stage, where businesses duke it out to get our attention, so having privileged spectrum access is a worthy investment for the companies that can afford it.
Most of the time, telecom companies buy spectrum band exclusivity from the government. They then sell this service to customers, comprised of online businesses and individuals alike. Those auctions also transfer money from private sector companies to the government. Companies can then operate online, using better 5G internet and build growth industries that stimulate the economy. That way, the government gets short and long-term benefits.
Wireless and online tech will only become more popular and crucial for economic growth, so shrewd spectrum management is essential. While this latest auction was ongoing, the White House announced a national spectrum strategy to improve the USA’s wireless infrastructure.
The Auction Winners
This recent auction concerned the 3,800 MHz spectrum band, which can be used to develop 5G wireless services. This comes amidst bids to push 5G adoption, especially to the benefit of rural and indigenous communities in Canada.
Given the sensitive nature of spectrum usage, the government restricted participants from buying too much to allow smaller businesses to compete. There’s also a ‘use-or-lose’ rule, so spectrum can be repossessed if not used within a specified timeframe. Payment on successful bids will also be staggered – a 20% deposit in January 2024 and the rest the following summer.
With that context, it wasn’t much of a surprise when Telus, Bell, and Rogers emerged as the biggest winners. From 22 participants, who contributed C$2.1 billion, 4,099 licenses were allocated over 98 rounds of auctioneering.
Of those, 1,430 were snapped up by Talus for C$619 million. Bell acquired 939 licenses for C$518 million, while Rogers got 860 at C$474 million. While they accounted for almost two-thirds of the money raised, many small businesses got their chance at buying licenses, as seen on the government’s provisional results page.
Last Updated on by soubhik
