Auction Day 20: Vidéotron and Shaw fight for last pieces of puzzle; bidding tops $4 billion

Shaw Communications and Vidéotron were among the most active in the early stages of Industry Canada's Advanced Wireless Services (AWS) auction, bidding on a wide range of properties in a number of markets. But as the bidding war approaches its end, the two companies appear to be going in opposite directions: one on the verge of securing its bandwidth and the other engaging in what could be a long battle.In Quebec, Vidéotron has largely won the properties it wants: 40 MHz across the entire province. The exception is the 10 MHz C-band licence covering northern Quebec where a skirmish with 768812 Ontario Inc. broke out on Monday. Vidéotron had held the property from Round 1 until Round 45, when a minor battle with Globalive Communications took place, and then again from Round 50 until Round 113 when the Ontario numbered company placed a bid on the licence.The Quebec cable, Internet and telephony company is also vying for an additional 20 MHz of bandwidth in the Quebec City and Chicoutimi/Jonquière regions. Vidéotron has been fighting head-to-head with Rogers Communications for the past several rounds for the rights to the A-band 20 MHz Chicoutimi/Jonquière property. As well, the Quebecor company has been battling Telus for control over the 20 MHz F-band licence for Quebec City.Baring some unforeseen change of bidding strategy, Vidéotron is poised to become a regional provider with a 40 MHz swath of valuable airwaves and possible 60 MHz in the Quebec City and Chicoutimi/Jonquière regions.However, this stands in stark contrast to the battle for western Canada. While Shaw has secured several licences critical to its strategy of becoming a regional wireless operator, it still has some unfinished business and it likely won't be easy for the Calgary company to round its spectrum portfolio.Arguably, Shaw has to bid on more players to get spectrum - a mix of new entrants and incumbent wireless operators - and this has made the company's fight to get a sufficient supply of bandwidth a monumental challenge. In the last 15 rounds, Shaw has bid on tier three properties in northern Ontario and the B-band northern Ontario licence itself as well as the licences covering Saskatchewan and Manitoba.It is clear from its bidding strategy that Shaw wants 30 MHz of spectrum from northern Ontario to Vancouver Island and it has secured that bandwidth in a number of areas. But the current gaps in its spectrum holdings are significant and are proving very difficult to fill.Shaw biggest roadblock comes in Saskatchewan where SaskTel is intent on acquiring 40 MHz of spectrum and won't likely give up anytime soon. Not only are the two companies going toe-to-toe in the 10 MHz C-band reserved licence, they are also duking it out in the 10 MHz D-band for the tier three licences of Regina, Moose Jaw and Saskatoon. SaskTel, with its deep pockets and Crown corp status, will likely spend anything to keep out facilities-based competition.Manitoba is another trouble spot for Shaw, having captured only 20 MHz of bandwidth. The other gap in its portfolio is northern Ontario, where Shaw has been unable to outbid competing companies for the provincial 20 MHz B-band or 10 MHz C-band properties. This has forced the company to cherry-pick the larger 20 MHz reserved licences in the northern Ontario region Sault St. Marie and Thunder Bay.So while Vidéotron looks to be on the verge of capturing a full 40 MHz of spectrum through its entire Quebec region, Shaw appears headed for a long battle to acquire 30 MHz of bandwidth for its territories of interest from Vancouver Island to northern Ontario.At the of Day 20, total standing high bids topped the $4-billion mark with Rogers, Telus Mobility and Bell Mobility leading the way with combined high bids of nearly $2.4 billion. Vidéotron leads new entrants with $582 million in standing high bids. Globalive has committed nearly $432 million, Data & Audio-Visual Enterprises Wireless (DAVE) has contributed $238 million and Shaw with $188 million.

Auction Day 20: Vidéotron and Shaw fight for last pieces of puzzle; bidding tops $4 billion

News | June 24, 2008

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