Auction Day 5: New entrants stay in the race for ILEC spectrum

There is some speculation that new entrants bidding on incumbent wireless spectrum are only doing it to retain eligibility points for later battles, and if that is true, they aren't giving any hints and don't seem ready to launch forays for their intended targets. Some have speculated that they are only doing this to bid up the spectrum on Bell Mobility, Rogers Communications, and Telus Mobility. But this is unlikely as the Big Three would have been bidding against each other on this spectrum in any event. EastLink owner Bragg Communications is a prime example. The Atlantic Canadian communications company has employed a focused strategy bidding on the 20 MHz A- and F-band licences (non-reserved spectrum) in Toronto and Ottawa in the early rounds. Then the company switched to bidding on the Toronto and Vancouver licences in the same bands, and in the last six or seven rounds has returned to bidding on the Ottawa and Toronto properties. Its bidding strategy has allowed it to retain all of its 356 eligibility points through the end of Round 16. But EastLink isn't fooling anyone. The company only needs 184 eligibility points to acquire all of the core mobile AWS spectrum in Atlantic Canada. With the remaining points, EastLink could then turn its attention to also landing some valuable bandwidth in southern Ontario (licences 328, 329 and 330 are in and around the London region). This would give its Amtelecom subsidiary some spectrum that it could use to add wireless to its bundle of services. As the Big Three fend off intrusions from new entrants on "their" spectrum, while also at the same time battling themselves for pieces of this bandwidth, there are also some smaller battles shaping up that are likely to have a major impact on the competitive landscape down the road. SaskTel is fighting hard for control Saskatchewan on a number of fronts: the 20 MHz A-band licences covering Saskatchewan; the 20 MHz set aside B-band and the 10 MHz C-band as well as the PCS extension G-band. The provincial Crown Corp. has been in battle with Telus for control of the non-reserved A-band and at the end of Round 16, Telus was atop the Regina property, while SaskTel held the Moose Jaw and Saskatoon licences. This may not seem like an exciting battle, but Telus needs spectrum in Saskatchewan, and the fight for this province might not be over. It has long been rumoured that the two companies aren't friendly. A few years ago, Telus service in Regina was spotty at best. The service worked fine in the downtown core, but in the far west end of the city, service was essentially non-existent. SaskTel is also fighting with Shaw Communications (1380057 Alberta Ltd.) in the set-aside bands. While SaskTel had held the B-band for several rounds, that changed yesterday when Shaw started to muscle in on SaskTel's action. This prompted a response from SaskTel, which placed a bid on the C-band Saskatchewan licence, which had been held by Shaw since the fourth round. At the end of Day 5 of bidding, Telus was at the head of the pack with standing high bids on 59 licences totalling more than $350 million. Globalive Communications was in second place with nearly $317 million committed to four licences. Bragg secured a place in the top three with its standing on bids on Toronto and Ottawa worth $247 million. Total standing high bids topped $2 billion yesterday and will likely surpass $2.5 billion today.

Auction Day 5: New entrants stay in the race for ILEC spectrum

News | June 3, 2008

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