March 13th, 2008Quebecor Makes it’s Move and it’s National
And then there were 3. Quebecor is the third major player to announce, officially, their participation in Canada’s spectrum auction. The shocker is that they too have set down enough funds to bid on all licences nationally. Quebecor has announced today probably in response to MTS and Yak jumping the gun back on Monday and one day before Industry Canada announces the full official list tomorrow. We could get more.
How the process works is that each spectrum applicant needs to place a deposit to qualify to bid on each geographic piece of spectrum and region of canada. The deposit effectively represents a minimum openening bid on each of these licences.
The game is on for national spectrum. In reality we don’t expect each of the entrants to bid aggresively on every licence, but placing a deposit to cover the whole thing does maximise options. I’m sure the game theory wheels are spinning furiously for both new and old entrants. In reality there is enough new spectrum for, at a stretch, 3 new national carriers, but taking more of the spectrum and sharing less is always best for the business model if the competing bidders can be scared off and you can get it for the right price.
Wider spectrum means you can serve more voice and data to more customers with fewer towers, less roaming and less competition. What’s more the extent to which spectrum can be concentrated or monopolized can bring high economic returns for carriers relative to a more open competitive market. This explains in part why a big chunk of spectrum was “set aside” in this auction as new entrants might never have had a shot at it otherwise, and the land rush (air rush?) to take advantage of it. Said Quebecor’s CEO Pierre Karl Peladeau today:
“However, exceptionally favourable conditions for new entrants, which may never occur again, persuaded us it is in the interest of our shareholders that we try to extend our deployment across Canada. We will see at the conclusion of the auction if such a deployment is possible.”
Previously: Everything you needed to know about the Canadian Spectrum Auction but were afraid to ask
