Canada’s Wireless Prices to Increase Due to 5G Spectrum Auction: Analysts

The federal government recently added $8.91 billion to its coffers, thanks to the 5G spectrum auction, with incumbents Rogers, Telus and Bell spending over $5 billion to nab up airwaves.

  • Bell: 271 licenses won for $2,074,088,697
  • Rogers: 325 licenses won for $3,325,600,269
  • Telus: 142 licenses won for $1,947,488,091

Known as mid-band 5G, 3500 MHz, or 3.5GHz is one of the most popular commercial 5G networks.

According to various analysts, the huge 5G investments by wireless carriers will likely result in prices rising for consumers, reports The Globe and Mail.

A recent report by telecom consultancy firm Lemay-Yates Associates said, “high prices for spectrum paid in auctions will ultimately flow to consumers, helping to keep prices high.”

Desjardins Securities said the spectrum auction was a “thorn” that will hit 5G profitability for wireless carriers.

According to Moody’s Investors Service, wireless carriers such as Rogers, Telus and Bell and others will result in higher consumer prices, as telecoms still need to spend on existing network upgrades, plus further invest in future spectrum auctions slated for 2023 and 2024.

A spokesman for Minister of Innovation, Science and Industry François-Philippe Champagne, told the Globe in a statement even after the federal government’s plan to reduce wireless prices for 2GB to 6GB plans, it will “continue to pursue policies to make wireless services more affordable, including through our spectrum policies and keeping providers accountable for their pricing.”

It’s not exactly a surprise that prices may increase due to the 5G spectrum auction. Bell’s CEO previously stated it would be “very difficult” to lower prices, due to the unfair 5G auction, which had set-aside spectrum reserved for smaller regional players.

The Liberal government says if Big 3 carriers do not lower pricing for 2GB to 6GB plans by the first quarter of 2022, the government will take further action to make it happen.

While incumbents spent big on 5G wireless airwaves, so did Quebecor, as it announced it plans to take Videotron “coast to coast” and become a fourth telecom player in Canada.

With reports noting over and over that Canada has the highest wireless prices in the world, if 5G prices do increase as expected, then we’ll proudly hold onto that crown for the years to come.