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TELUS CEO Warns of ‘Bloodbath’ if Verizon Gains Advantage in Spectrum Auction

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TELUS CEO Darren Entwistle, speaking at an editorial board meeting on Thursday, told the Financial Post Ottawa’s goal of having four national wireless carriers could result in negative consequences for incumbent carriers:

His primary concern is that if a foreign player with massive resources such as Verizon Communications Inc. takes part in the Canadian auction, it would be treated as a “new entrant” and permitted to bid on up to two out of four prime blocks of spectrum.

The Canadian incumbents would be capped at just one block, leaving Telus, BCE Inc. and Rogers Communications Inc. as well as smaller regional players such as Videotron fighting over the two remaining blocks of spectrum.

“There’s going to be a bloodbath, because people are not going to give up on getting that block,” Mr. Entwistle said. “So it’s going to be prohibitively expensive and suck a lot of money out of the industry – money that won’t go to infrastructure and technology, money that won’t go into rural coverage or support lower prices.”

So the increased spending by incumbents to ensure they don’t miss out on the 700 MHz spectrum would result in less investments in infrastructure, could negatively affect rural wireless coverage, and threaten monthly prices.

Interestingly, Entwistle says it might be tough to work together with fellow rivals because “The level of bitterness on the competitive front between Telus, Bell and Rogers makes it very difficult to collaborate unless the circumstances are extremely dire.”

All three incumbents want a level playing field. Entwistle suggests three changes for Ottawa to make: open up the auction entirely and remove purchase caps on players; cap Verizon like incumbents; allow bidders to purchase up to two blocks of spectrum.

Yesterday, Verizon noted during the company’s quarterly earnings call their interest in Canada was an “exploratory exercise.” Things look to get interesting in the next year or two on the home wireless front.

TELUS acquired spectrum licenses form Novus Wireless last month

In a separate report, The Financial Post reveals TELUS last month purchased spectrum from Novus Wireless, the same frequencies used by Public Mobile:

Industry Canada licences dated June 27 show Telus now owns the right to use airwaves in the so-called G-band frequency covering the provinces of Alberta and British Columbia. The government originally sold those licences to Novus Wireless Inc. in the 2008 public spectrum auction.

TELUS had earlier attempted to acquire cash-strapped wireless entrant Mobilicity for $380 million, but the deal was rejected by Ottawa, citing spectrum set aside for new entrants “was not intended to be transferred to incumbents.”

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  • Jeeverz

    “So it’s going to be prohibitively expensive and suck a lot of money out of the industry – money that won’t go to infrastructure and technology, money that won’t go into rural coverage or support lower prices.”

    “The level of bitterness on the competitive front between Telus, Bell and Rogers makes it very difficult to collaborate unless the circumstances are extremely dire.”

    What a pile of horse sh^#. Bring Verizon, because this “Entwistle suggests three changes for Ottawa to make: open up the auction entirely and remove purchase caps on players; cap Verizon like incumbents; allow bidders to purchase up to two blocks of spectrum.” is what we are trying to prevent. Your time is done. I hope Verizon comes and levels the playing field by steam rolling the Big 3 into a reasonable playing field

  • Michael

    Anything that results in a bloodbath for the incumbents is good for Canada. They’ve had enough chances to show that they would ever use their oligopoly power to lower prices or do anything pro-consumer.

  • kkritsilas

    Quoted as coming from Mr. Entwistle:

    “So it’s going to be prohibitively expensive and suck a lot of money out
    of the industry – money that won’t go to infrastructure and technology,
    money that won’t go into rural coverage or support lower prices.”

    Let us now point out what has happened to plan pricing even before Verizon has a presence here. Look at your current plans, and the plans in place a month ago. It is true that the the pricing to recover the device subsidy over two years vs. three is higher, but your plan prices have increased far in excess of what the subsidy increase would have addedl by factors of 3-4X. Maybe Mr. Entwistle would care to comment on that?

    Also this:

    “The level of bitterness on the competitive front between Telus, Bell
    and Rogers makes it very difficult to collaborate unless the
    circumstances are extremely dire.”

    Really. Considering that Telus and Bell Mobility pretty much share a network, is it possible that this, in the case of Bell and Telus, is just a little bit overstated. As in completely misrepresenting the reality of the situation? How bitter can it be when all 3 incumbents have been colluding since there has been cellular service in Canada?

    Statements like this is what drives people to mistrust the Big 3. I hope Verizon comes in, completes the roll out of WInd’s network, and DOES grab 2 of the 4 slots, and continues with the plan pricing that Wind currently has. See if your customer base doesn’t evaporate then, Mr. Entwistle.

    Kostas

  • I was going to point out that cooperation between Telus and Bell, but you beat me to it. I agreed with you on every point. Let them suffer.

  • Qwer123

    What lower prices? Is there a such thing?

  • K3

    Just yesterday didn’t you tell me to calm down over this?

  • Arcsvibe

    Hahahahaha good one Darren….keep smoking the good stuff…

  • Anthony

    Can I have some of what he was having? 🙂

  • Anthony

    He needs his pill.

    Anyways, I can’t wait and see what’s going to happen.

  • 1His_Nibs1

    Support lower prices? Like the price increase all 3 just announced because of the CRTC making them offer 2 year plans now instead, so now they have to recoup that money (phone subsidy my ass) that they’re now losing because of a lost year? Fuck Robellus! I will say this……I’m loving every minute of watching these buffoons squirm. As far as Entwistle’s comment about money not going into rural coverage, I think that’s just a red herring.

  • ????Dennis

    He’s fed up…. I share his sentiments as do the 13 other votes. Don’t worry… Bellu$ and Roger$ will still keep you as a customer and you can pay their bullish!t prices.

  • K3

    You missed the point, just the day before was a “calm down buddy” then this.. safe to say more than just that 13 votes is fed up with the mobile market up here.

  • K3

    & a hug…

  • No lies

    So you’d prefer seeing a Canadian company fail at the hands of an American in hopes of “lower prices” assuming Verizon actually does that. What’s next? Have a country who’s industries are all owned by foreigners? That’s exactly what we need take Canadian jobs away and ship em to India. But who cares as long as you save a few supposed dollars whatever makes you sleep at night right?

  • No lies

    I bet you were the first to ask for 2yr terms huh? How’s that working out for you btw?

  • Haha, not at all. I’m actually a huge supporter of Canadian companies, but I draw the line when corporations happily gauge their customers. I think those companies need to suffer until they learn their lesson.

    If Verizon enters Canada, the Big Three will continue, but they will learn their lesson for the years they overcharged their customers and colluded on high pricing.

    If we’re being honest, I think a lot of telecom should be publicly owned, or at least the network, but I don’t think I’m in the majority.

  • Al

    If you were a slave, and your master beat the shit out of you on a daily basis, would you say, “that’s ok, because my master is Canadian”? Figuratively speaking, that’s what these telecom masters are doing to their fellow Canadians. No way in fucking hell do I want to support that shit!

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