The Canadian government has made a line-in-the-sand and is not letting the country’s largest wireless providers, Rogers and Bell, bully their way over that line. The two providers tried in a joint venture to maneuver 83 wireless spectrum licenses from NextWave to Inukshuk, which is owned by Rogers and Bell – but the government nixed the move, setting up a possible precedent for future deals.
Canada’s Industry Minister James Moore says that Bell and Rogers would have grown their total 2.3GHz spectrum from 29-percent all the way up to 77-percent if they would have let that deal go through. The Government does not want an unacceptable level of spectrum to fall in the hands of any of the incumbents – they want nothing to hurt the competition in regions including Montreal, Ottawa, Edmonton, and other mid-size cities.
The Canadian Government has a history of blocking anything that will increase the big carriers in an effort to increase competition and provide an edge to the smaller up and coming carriers. They twice blocked TELUS, the third largest carrier, from acquiring Mobilicity, who is on the verge of going out of business.
In the latest Spectrum Sale, which netted the Canadian Government a record C$5.27 (US$4.78) billion, however, the biggest surprise was the growth of Quebecor Inc’s Videotron as they expanded their services outside their home base in Quebec. Quebecor paid C$233 million for spectrum in Ontario, Alberta, British Columbia, as well at their home base in Quebec. Most of Canada’s population lives in those four provinces and by expanding to those areas, the government made its point – they now had four competitors in each of those regions. Moore has publicly debated with the larger carriers about the fairness of Canadian Governments policies and said:
“We will not approve any spectrum transfer request that results in excessive spectrum concentration for Canada’s largest wireless companies, which negatively affects competition in the telecommunications sector.”
The final result that the Government is hoping for is better coverage for all Canadian wireless customers. They should have much better sound quality, prices should become more competitive, and they should have access to a wider selection of smartphones – all good, but only time will tell if Moore’s hard-line tactics will pay off.