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Canada looks to bolster mobile competition with 700MHz spectrum auction and more foreign investment

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The Canadian government has announced plans to auction off the recently freed-up 700MHz spectrum and allow more foreign investment in small telcos. Both moves hope to spur more competition in the market.


The Canadian government has announced two significant moves in hopes of improving the nation's telecom market: an auction for the 700Mhz spectrum and the lifting of foreign investment restrictions for smaller telcos. The spectrum auction is due to the country's switch from analog to digital over-the-air TV signals last August, freeing up the 700Mhz channel for LTE. What little LTE coverage Canada currently has operates on the 1.7GHz and 2.1GHz AWS frequencies. The 700MHz spectrum allows for greater building penetration and has less signal loss over long distances, and will also bring Canadian carriers in line with some of the LTE bands currently used by AT&T and Verizon. The bidding is set to start in the first half of 2013.

The spectrum will be auctioned off as four blocks, meaning the nation's big-three providers — Rogers, Bell, and Telus — will each only be able to purchase a quarter of it. The final 25 percent will be reserved for smaller carriers to bid on. Another restriction will be that auction winners must guarantee timely rollout of 700MHz LTE to rural areas. Canada's vast size but low population density has made rural cellular access spotty in many parts of the country. If any of this sounds familiar, it's because the US held a similar auction for its 700MHz spectrum in 2008.

The government also announced plans to lift all restrictions on foreign investment in Canadian telecom companies that have less than 10 percent marketshare. Previously, foreign investors were limited to owning 46.7 percent of Canadian telcos. Most of the small players in the country, such as Mobilicity and Wind Mobile, only provide coverage in urban areas. Allowing up to 100 percent foreign ownership of these companies will hopefully make them more competitive with the major players.

Both moves are clearly slights to the incumbent providers that have dominated the Canadian telecom scene for over a decade. However, with limited competition between the major players, smaller telcos entering the market, and rural access an issue for many Canadians, the move is being lauded by many as being positive for consumers.