Auction Day 13: Vidéotron stepping back from 40 MHz set-aside goal

It appears as though Vidéotron has given up hope on trying to acquire the 40 MHz of set-aside spectrum in its home province of Quebec. After several rounds of swapping standing high bidder status with Globalive Communications on the 10 MHz D-band properties of Bas du fleuve/Gaspésie, Quebec City, Chicoutimi-Jonquière, the Eastern Townships and Trois-Rivières, the Montreal-based cable, Internet and telephony provider backed away from the fight, allowing the Yak Communications owner to control the licences. But Vidéotron still has its sights on getting 40 MHz of spectrum. As the company took a step back from its battle with Globalive, the cable company launched a strike against Bell Mobility for the 10 MHz E-band licences in those regions. The strategy could prove prudent given Bell's continued uncertainty with its takeover. Perhaps the country's largest telephone company might actually reach price exhaustion before Globalive and its deep-pocketed financial backers. New entrants not giving up on ILEC spectrum anytime soonBell Mobility, Rogers Communications and Telus Mobility - collectively the Big Three - are stinging just a bit more today as a result of Industry Canada's decision to set aside spectrum for new entrants. The incumbent wireless players are locked in a dog fight with new entrant wannabes for significant chunks of the non-set aside spectrum. But the Big Three are likely also hurling explicatives at these pesty potentials, namely Bragg Communications, Globalive, Shaw Communications and Vidéotron, for continuing to go head-to-head with them deep into the auction. Industry Canada's Advanced Wireless Services (AWS) spectrum auction has produced a windfall for government coffers - more than double analysts' expectations - and the new entrants are contributing an important part of the nearly $3.6 billion raised so far coffers. At the end of Round 55, total standing high bids from the top eight new entrants reached approximately $1.4 billion with the Big Three contributing the balance of about nearly $2.4 billion. The amount of money already committed by new entrants and incumbents alike raises the question about the economics of building out a network. While the Big Three have deep pockets and can secure the additional financing required, new entrants faced with higher than expected spectrum costs could find it more difficult. However, given the intensity of their bidding against the ILECs and among themselves, one would assume they have talked to their bankers and financial partners about the increased financial risks. Battling in Atlantic CanadaBragg and Rogers are still fighting for control of key pieces of Atlantic Canadian spectrum in the 20 MHz A-band licences. Other than the Mainland Nova Scotia licence currently held by Bell Mobility, the two companies have exchanged standing high bids for the other properties over the last several rounds. Bragg is also going toe-toe with Rogers for the Sudbury and Kirkland Lake ON A-band licences. Telus has also faced stiff opposition from Bragg for the 10 MHz E-band licences in the Atlantic region. The two companies have swapped standing high bidder status on those properties for the last several rounds as well. Bragg's bidding position remains strong. The EastLink owner still has all of its eligibility points and four waivers left. Fighting for mid-market Ontario and AlbertaAs was noted earlier this week, Globalive is trying to fill out the gaps in its spectrum holdings to form a near national licence. The company already has a lock on some key properties such as British Columbia, Alberta, Northern and Southern Ontario as well as parts of Atlantic Canada. But in recent rounds, Globalive has gone head-to-head primarily with Rogers and Telus for parts of the mid-sized licences in Ontario and Alberta. Nearly three weeks of bidding will come to a close tomorrow, but the battle for spectrum across the country appears to be far from over.

Auction Day 13: Vidéotron stepping back from 40 MHz set-aside goal

News | June 13, 2008

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