Posted by
cellpart on Wednesday, July 23, 2008 10:00:00 AM
Updated Tue. Jul. 22 2008 5:11 PM ET
CTV.ca News Staff
The federal government's $4.25 billion wireless spectrum sale will change
Canada's cellphone industry forever, Industry Minister Jim Prentice said Tuesday.
Prentice said the auction was meant to help create more competition in the
cellphone industry so that Canadians will see a reduction in costs and an improvement
in services.
The minister said he's received estimates that it could take up to a year
to see more competition hit the marketplace.
"But I certainly anticipate that at some time between now and that date that
we will begin to see new competition in the marketplace," Prentice told reporters
in Edmonton.
Prentice said the government has still not decided exactly what to do with
the $4.25-billion windfall from the sale. However, he did say that Finance
Minister Jim Flaherty has indicated that Ottawa's priorities include paying
down the national debt and reducing taxes.
Fifteen firms took part in the sale, which lasted for 331 rounds of bidding
over eight weeks.
Among the successful bidders was little-known Globalive Communications Corp.,
which sells Yak long-distance services in Toronto. The company spent $442 million
to acquire licences to operate in provinces outside Quebec.
Shaw Communications Inc., mostly known in the western provinces, Quebecor
Inc. and Bragg Communications Inc. were also successful bidders, hoping to
broaden their networks.
Rogers spent more than any other firm, buying up $999 million worth of licences.
Telus had C$879.9 million in standing high bids while Bell spent $741 million.
A portion of the spectrum was only available for new firms, so major companies
like Rogers could not dominate the sale. Additionally, new market entrants
cannot sell their spectrum licenses to the industry giants for the first five
years of the 10-year term.
Quebecor's Videotron spent $555 million in licences in Quebec. It could now
join forces with Globalive to create a national network.
Data & Audio-Visual Enterprises (DAVE) Wireless Inc., which is partly
operated by Microsoft co-founder Paul Allen, also bid on $243 million worth
of spectrum in Ontario, Alberta and British Columbia.
Prentice said the companies that bought spectrum are likely to put it to use
and not hoard it since the licences are only valid for a decade.