The Canadian government is focused on its hotly anticipated spectrum auction rather than changing foreign ownership restrictions on the country’s telcos, according to James Moore, Industry Minister.
Speaking to Reuters, Moore said the government is encouraging smaller players to challenge the ‘big three’ Canadian operators in the auction for 700MHz spectrum due to take place in January next year. “Our policy is the auction, and we’ll see what happens,” he said.
The deadline for interested parties to register passed on Tuesday (17 September). Moore did not say whether any new entrants had signed up, although a list of bidders will be published on Monday.
Orascom-owned Wind Mobile recently confirmed to Canadian mobile publication Mobile Syrup, that it will take part in the spectrum auction. Another small player, Public Mobile, has also expressed its intention to take part in the auction.
The auction has been hit by controversy with BCE, Rogers Communications and Telus, the three biggest players in the Canadian telecoms market, having said the auction rules unfairly favour big foreign companies.
The government last year removed limits on foreign ownership for telecoms companies with less than 10 per cent market share but maintained them for the three largest operators.
The removal of the foreign ownership limit led to interest from Verizon Communications, which reportedly made a $670 million bid for Orascom-owned Wind Mobile in June and entered takeover talks with Mobilicity. However, the US-based company is now believed to be delaying any moves until after the spectrum auction.
The big three are also effectively banned from acquiring smaller domestic rivals after a deal for Telus to acquire Mobilicity fell apart in June due to spectrum owned by the latter being reserved for new entrants for a set period, meaning Telus could not control it.
The government has said moves that lead to “undue spectrum concentration” will not be permitted, meaning that the potential for an incumbent to buy a smaller competitor appears to be limited even after the restrictions on ownership of the spectrum licences issued in 2008 expire.
BCE said the government’s decision to effectively block Canada’s largest players from buying smaller domestic competitors would allow Verizon to acquire those businesses at “cut-rate prices”.
The big three also took their concerns about US firms entering the market to the government in July, according to Bloomberg.
According to GSMA Intelligence, Rogers had 9.4 million connections at the end of Q2 2013, with BCE and Telus both having around 7.8 million. With just 28.6 million connections in the whole of Canada, the three operators hold 87 per cent of the market.
Wind Mobile has around 620,000 connections, while Public Mobile and Mobilicity have 419,000, and 356,000 connections respectively.