Bell Says Unfair 5G Auction Will Make it ‘Very Difficult’ to Lower Wireless Prices

As Canada’s 3,500 MHz 5G spectrum auction drew to a close last week, Bell Canada Enterprises (BCE) Inc. bagged 271 of the available licenses for a whopping $2.1 billion CAD.

Quebecor, being a smaller, regional telecom provider, was able to purchase 294 blocks of the spectrum for approximately $830 million CAD, much to the chagrin of BCE President and Chief Executive Officer Mirko Bibic.

According to BNN Bloomberg, Bibic said in an interview on Thursday that the way the auction’s format forced national providers like BCE to pay egregiously more than smaller providers will ultimately make it harder for the federal government to make good on its promise of slashing wireless bills by 25% by 2023.

Bibic essentially said the government can’t expect big telcos to charge less for wireless when they have to pay more for spectrum licenses, and that it should reconsider the way 5G spectrum auctions work.

“I think, actually, government’s got to take a long, hard look at this. You can’t on the one hand keep driving, from a public policy perspective, keep asking for prices to be lower, and lower and lower, which actually is a laudable goal; but at the same time, [they] designed an auction that’s going to make that very, very difficult,” said Bibic.

“The way [the government] designed the auction actually ended up being an implied subsidy of $4 billion for regional wireless players. That’s $4 billion that Canadian taxpayers basically subsidized to regional players, and some of these regional players are dominant in their own right: you just have to think of the Quebec wireless player that picked up a lot of set-aside spectrum,” he added.

Bibic was of course talking about Quebecor, which, through its Vidéotron division, snatched up 294 blocks of the spectrum after receiving what the Bell CEO believes to be around $2.3 billion CAD in subsidies.

Bell’s main competitor, Rogers Communications Inc., won the most bids at the auction. Rogers spent $3.3 billion CAD on 325 licenses.

Over half of the blocks Quebecor bought did not belong to its home province of Quebec, and were actually for Ontario, Manitoba, Alberta, and British Columbia. With the investment, Quebecor aims to compete with the Big Three (BCE, Rogers, and Telus) nationwide.

Bibic argues that if regional telecom providers are being given preferential access to and discounts on spectrum licenses outside of their respective regions, the government should restructure the 5G spectrum auctions and make them more of a level playing field.

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