First phase of 2300/3500 MHz residual auction closes, trends begin to emerge

The first phase of Industry Canada’s residual auction of unassigned 2300 MHz and 3500 MHz licences has closed, and it was marked by the departure of two potentially high-impact players. First an affiliate of Joe Church’s Wispra Inc. withdrew without placing a bid. UBS Wireless Services Inc., a subsidiary of Unique Broadband Systems Inc. (UBS), exited the auction after withdrawing all of its bids. An article in this issue discusses the withdrawal of UBS, the owner of wireless cableco Look Communications Inc. Despite these two high-profile departures, trends have begun to emerge with several players making a power move to secure bandwidth within and outside of their traditional operating territories. As expected, Bell Canada and Rogers Wireless Inc. are beefing up their holdings from the first auction by placing bids on a variety of licences across the entire country. Telus Mobility, under the Tele-Mobile moniker, is also trying to secure a swath of licences in several regions of the country. But some of the smaller companies appear poised to make a huge impact. Mipps Inc., a subsidiary of Primus Telecommunications Canada Inc., appears ready to compete on a national basis as it is trying to secure nearly 40 additional licences on top of the eight it won in the first auction (all G-band) from Halifax NS to Kamloops BC. Of the 37 new bids, the company is uncontested in only eight (Halifax, Fredericton, Quebec City, Sudbury, Thunder Bay, Winnipeg, Regina and Saskatoon). In the first auction, Mipps, which was prior to the auction focused on serving the Greater Toronto Area, paid $1.8 million for such lucrative licences as Toronto, Vancouver, Ottawa, Calgary and others. It is interesting to note that other than its Toronto property, all of its other properties are in the G-band. Mipps could be Primus’ vehicle to greater facilities-based competition in the marketplace and if successful in the auction would be substantially less expensive than trying to lay fibre. In an interview earlier this year, Primus Canada head Ted Chislett told Report on Wireless that it was too early to talk about the role of Mipps within the greater company and the future of wireless ISP. "We’re largely in long distance today and we’ve been looking at ways to expand into the local and access marketplace - one of those being Voice over IP and Talkbroadband. Another is local resale. And then the third is wireless to try and provide that. We have a pretty extensive inter-city long distance network across Canada (and we’re) trying to get more on the access side of things. Our Mipps initiative is that way, and today is focused on small businesses. We’ll see where that goes as the price structures start changing in the wireless marketplace," he told RoW this summer (RoW, June 30/04). Distributel Spectrum Inc., affiliated with long distance provider Distributel Communications, is another small communications provider that appears to be looking to make an impact in the auction. The company also has some industry experience behind it. Mel Cohen, president, led a battle with Bell Canada in the early 1990s that helped clear the way for competition in the long distance services market to emerge. The company stayed primarily in Central Canada placing bids on 86 licences from Matane QC to Fort Francis MB. Distributel submitted a deposit of nearly $2.5 million covering 1,507 eligibility points. The company hasn’t shied away from some of the more lucrative licences either going against industry heavyweights Bell Canada, Rogers Wireless and Telus Mobility in serving areas such as Ottawa, Montreal and Toronto. Distributel not only offers long distance services, but has expanded into dial-up Internet access and high-speed Internet and as such could be looking for some licences to expand its footprint. The company could also be looking to enter the local telephony market in the future using wireless Voice over IP. This is an analysis of two of the bidders. Report on Wireless will continue to follow the spectrum auction through daily coverage on our web site. Be sure to check our web site often to find out more information on the timing of the auction.

First phase of 2300/3500 MHz residual auction closes, trends begin to emerge

News | 10/05/2004 4:00 am EDT

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