Large Canadian wireless companies spend nearly $9B on new 5G spectrum

Large Canadian wireless companies spend nearly $9B on new 5G spectrum

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In the results announced after the close on Thursday, the federal government raised $8.9 billion in a license auction for key bands of 5G wireless spectrum.

Canada’s three leading wireless companies have obtained hundreds of licenses for radio waves in the 3,500 MHz frequency band.

The 3,500 MHz band will be important because operators use it as a building block for their 5G networks. It is expected that more operators and smart phone hardware devices will use this frequency band.

Intermediate frequency bands such as 3,500 MHz are useful in urban and rural areas because they can transmit considerable distances and through buildings.

The Minister of Innovation, Science and Industry François-Philippe Champagne said: “The 3,500 MHz auction is a key step in our government’s plan to promote competition in the telecommunications industry, improve rural connectivity, and ensure that Canadians benefit from 5G technology and services.” In the statement.

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“As expected, small and regional providers have access to more spectrum, which means that Canadians can get better wireless services at a more competitive price, which is important for work, online learning, and staying in touch with their loved ones. It’s never been so important.”

In addition to Rogers, Bell, and Telus, licensed operators include Videotron, Xplornet, and SaskTel.

Rogers won the largest number of 325 licenses at a clock price of $3.3 billion, which will allow them to serve 34 million people.

The company said its investment will enable 99.4% of Canadians to use 5G.

“This investment in 5G spectrum will build on our existing 5G assets, enabling us to provide the world-class connectivity Canada needs to increase productivity, drive innovation, create jobs, and contribute to the global economy in the coming decades. In the competition,” said Jonathan Tale, President and CEO of Rogers Communications, said in a statement.

“We participated in this auction with a clear plan and obtained the spectrum needed to continue to promote Canada’s largest and most reliable 5G network and provide our customers, shareholders and Canada with long-term value.”

The auctioned wireless spectrum frequency band is the 3,500 MHz frequency band, which is essential for the rapid movement of large amounts of data on 5G networks. (Francesco Seco/Associated Press)

Videotron purchased 294 licenses, Bell received 271 licenses, and Telus won 142 licenses. Xplornet received 263 licenses.

Videotron’s parent company Quebec said its investment in 5G auctions is another step in its expansion outside Quebec. It said that more than half of the investment was concentrated in southern and eastern Ontario, Alberta, Manitoba and British Columbia.

“This major investment paves the way for large-scale projects in Quebec and other provinces of Canada in the coming years,” said Pierre Karl Péladeau, Quebecor President and CEO.

“Our success in Quebec has provided excellent services to Quebecers. Today, we are taking another step towards providing more Canadian consumers with leading technology and healthy competition.”

As Rogers is waiting for regulators to approve the acquisition of its parent company Shaw Communications Inc., Freedom Mobile, the country’s fourth-largest mobile phone service provider, chose not to participate in the auction.

A similar auction was held in the United States last year, raising $4.5 billion in net proceeds. Ottawa’s US$8.9 billion far exceeded the US$3.5 billion raised in the 2019 spectrum auction for different, less-than-ideal wireless bands.

In total, 1,495 of the 1,504 available licenses were issued to 15 Canadian companies, of which 757 were issued to small and regional suppliers across the country.

National and regional operators collectively spend billions of dollars at auctions to obtain licenses for their spectrum for wireless services.

The 5G compatible license will allow more voice, video and data to be shared between smartphones or other devices.

The auction was originally scheduled to take place last year, but it was postponed for six months due to the COVID-19 pandemic.

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