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^{[Introducing our newest contributor Ted Copewistle. In this post, his brave predictions on what the spectrum auction means for the wireless industry in Canada. Everyone is entitled to their opinions (for an earful, just ask the real Ted) and conjectures, but we at WirelessNorth.ca think there's some truth in this one. Enjoy. ]}

It’s going to be an interesting couple of years.  Here’s how it’s probably going to play out:

The Cartel (also known as “the incumbents”)

Bell and TELUS

Bell and TELUS will launch GSM (well, UMTS – that means some form of HSPA for the data focused folks) in the next 18 months together.  They’ll do a coordinated rollout.  TELUS will most likely focus on Alberta, BC, and probably Quebec (including Ottawa) and Bell will take the rest of the country.  Both probably won’t touch their AWS spectrum until 3 or 4 years, and even then they will most likely launch services just to fulfill licensing conditions.  TELUS has a wack of spectrum across the country thanks to the Clearnet buyout in 2000.   They have lots of room left on their existing spectrum – they are only using 36% of it at 1900MHz in their busiest market (Toronto), which means they have ample space to launch a 5MHz UMTS channel at 1900MHz nationwide.  Bell doesn’t enjoy such a rich spectrum position at 1900MHz but they have enough to launch as well.  What’s the upside of launching at 1900MHz?  Well, it gives both Bell and TELUS access to a lot of devices (iPhone anyone?) immediately.  They would love to have core coverage up and running in the major markets by the end of this year, but they are still finalizing vendors, so it’s doubtful they’ll be successful.

Rogers

Rogers is Rogers.  They’re sitting pretty and have a huge head start.  Their downfall will be their arrogance, which is bigger than the Sky… I mean, Rogers Centre.  And it’s only getting bigger.

NKOTWB (New Kids on the Wireless Bloc)

Videotron

As far as the new entrants go, Videotron will make a big splash in Quebec.  Them getting Toronto spectrum was a smart move too.  Expect them to take a chunk from the incumbents through aggressive bundling as they did with their home phone offering.  Quebecers are fiercely nationalistic, and any illusions of Bell being a Quebec company based out of Montreal are long gone.  Back in the old days, Bell Mobility had 65% market share in Quebec versus Cantel/Rogers.  Fido took a decent chunk of that, but barely made a dent in the rest of the country. Most Fido customers were in Quebec and Toronto.  That’s why Videotron focused their auction dollars where they did.

Shaw

Shaw will do next to nothing.  They may or may not launch a network, but if they do, they will go for high ARPU customers, and will focus on city coverage and rely on roaming in rural areas.  Rumour has it they have already signed a roaming agreement in intent and a tower sharing agreement with Rogers.  $80 all you can eat voice and data in-territory anyone?  Save an extra 5% if you bundle!

Globalive

Globalive will do okay, but they’ll quickly run out of capital unless foreign ownership restrictions are lifted. Think “new Fido”.  They’ll be aggressive and most likely establish a rabid following of customers in places like Toronto and Vancouver, but they’ll be hard pressed to make money.  Look for them to resell their services to others (such as Videotron) and to use the Wind brand that Weather Investments uses in Europe. They will also wrongly think that their Yak brand will have legs and leverage that as a discount brand. Everyone’s gotta have one, after all.  Apparently.

DAVE

DAVE is a curious play (put up a website already!) but I wouldn’t underestimate them.  They are successfully flying under everyone’s radar, which isn’t a bad thing right now.  Bitove is successful guy, and he’ll leverage the distribution and marketing experience of his XM Canada business to drive things early.  They’ll be a niche player, but fully expect them to leverage another global brand, as he has done in the chicken (KFC), pizza (Pizza Hut), mexican food (Taco Bell), and satellite businesses.  It could be anyone, but they’ll probably try for Three, Orange, Vodafone, or T-Mobile.  ”Kentucky Fried Wireless” gets my vote.

Bragg (Eastlink)

Bragg will do okay in their region, and their strategy will be more in the vein of Videotron than Shaw.

An easy guess is that all of these regional players (save Globalive, perhaps) will form a national alliance, similar to Mobility Canada and the North American GSM alliance in the old days.  It’ll be the easiest way for them to provide service pseudo nationally while only leveraging Rogers (and eventually TELUS and Bell) for rural coverage when necessary.

Who wins?

Rogers will, as long as they don’t become complacent and keep their newly acquired arrogance at bay (e.g. Bell).  They have the most spectrum across cellular, PCS, and AWS bands.  Nadir (President and COO) is a sharp cookie, so as long as he’s around, they’ll be in good steed.  Ted is just a lovable figurehead with bright orange and baby blue suits.  Remember, before Nadir, that place was a mess, and Ted was around in full force.  Nadir brought accountability, stability, and focus to the organization and has executed brilliantly.  Plus, they have a HUGE head start.

TELUS will do very well.  They are spectrum rich, and Darren Entwistle is relentless and wants, no… needs to win.  Their Koodo move seems to have worked as a market share grab, even though it’s hurt ARPU somewhat.  The move to GSM will be their saving grace.  Expect them to become the #2 carrier in subscribers shortly.

Bell is an enigma.  George Cope is a great leader, but he has inherited a big mess.  He and his ex-Clearnet crew have been around for a while, and they haven’t made a huge impact on wireless operations.  No more beavers, but they were the folks who hired them in the first place.  A new logo, but no new ideas. Privatization could be positive as long as the new owners are committed to injecting some serious capital into the organization in order to build real long term value.  Short term pain (losses), long term gain (profit! yay!), sort of idea.  The new owner’s track record with the Toronto Maple Leafs does not inspire confidence in their commitment to this new hobby/cause.

Rogers wins among the incumbents.  Globalive among the new entrants.  Videotron among the new regional players.

It’s a good time to be in the industry, that’s for sure, and a pretty exciting time for anyone who’s interested in this stuff.  

Maybe Bell is right.  Things just did get betterer.