Telus is expected to score high at the forthcoming wireless spectrum auction set to kick off on Tuesday, leaving Bell and Rogers behind. On the financial side: the auction won’t bring as much money as the AWS-3 spectrum auction held a month ago brought. During that auction, the government raised $2.11 billion (via the Globe and Mail).
The catch: There is a cap on how much of the 2,500 MHz spectrum any player can hold, and that is 40 MHz in each service area. Under the auction rules, there are 58 regions plus the Northwest Territories, Yukon, and Nunavut. While the latter two have no caps on the amount held, the problems for some incumbent carriers arise in the 58 regions where a cap is enforced.
Rogers and Bell have already exceeded the cap in some of the regions, leaving Telus in pole position, so it will automatically licence new airwaves in many areas.
“I don’t expect there to be excessive valuations … I don’t expect Bell and Rogers to spend very much, but that’s because of the cap, and therefore, there’s a bit of a free ride for Telus,” said Dvai Ghose, head of research at Canaccord Genuity.
Other carriers registered for this auction are Eastlink Wireless and Tbaytel. Wind Mobile and Videotron will access spectrum easily, according to Dvai Ghose.
The 2,500 MHz spectrum auction will raise roughly $850 million, according to a January estimate by BMO Nesbitt Burns Inc. analyst Tim Casey.