Telus plotted to expand its 5G coverage footprint to 75 per cent of the Canadian population by the year-end, after spending almost CAD2 billion ($1.6 billion) on mid-band spectrum which CEO Darren Entwistle characterised as artificially overpriced.
The Telus 5G network currently covers a relatively small number of geographic areas, some of which are major population centres. Following the conclusion of a 3.5GHz spectrum auction last week, Entwistle told investors the operator would press on with deployments.
Telus committed CAD1.9 billion on 142 licences: Entwistle stated prices paid by operators were inflated by the Canadian government’s “asymmetric set-aside”, a programme which reserved 50MHz of spectrum for smaller regional operators in many markets, and predicted the higher fees could ultimately hurt consumers.
“If you have a cost escalation in your factors of production, that’s inconsistent with a de-escalation from a price perspective”.
The executive noted the average price per MHz/pop was CAD3.28, almost three-times greater than US operators paid in a recent C-Band auction.
Canada raised CAD8.9 billion in the sale, with 15 companies securing licences. The government stated the process would extend 5G availability to more remote areas of the nation.
More than half the licences went to smaller operators. Innovation Science and Economic Development Canada (ISED) noted in a statement these providers increased their total spectrum holdings by more than 50 per cent. At least one small or regional provider now holds spectrum in each of Canada’s 172 service areas.
Key Telus rivals Rogers Communications committed CAD3.3 billion for 325 licences and Bell Mobility CAD2 billion for 271 licences.
IDC research VP for communications Lawrence Surtees, who specialises in the Canadian market, highlighted Telus’ expansion plans are for non-standalone (NSA) 5G, predicting operators won’t deploy standalone (SA) until mmWave spectrum is available and warning it could take three years for a separate revenue stream from the technology to emerge.