Canada is set to start the much-awaited spectrum auction to allocate bandwidth necessary for rolling out 5G network, Reuters reported.
The 3,500 MHz is a spectrum companies need to provide 5G, which requires more bandwidth to expand internet capabilities. The spectrum auction, initially scheduled for June 2020, is expected to take several weeks with Canadian government selling off 1,504 licenses in 172 service areas.
The auction has no scheduled end date, although the federal ministry in charge of the spectrum auction has said winners would be announced within five days of bidding completion.
Smaller operators are going into the auction complaining that recent regulatory rulings have tilted the scales in the favour of the country’s three biggest telecoms companies – BCE, Telus and Rogers Communications – which together control around 90 percent of the market as a share of revenue.
Canadian mobile and internet consumers have complained for years that their bills are among the world’s steepest. Prime Minister Justin Trudeau’s Liberal government has threatened to take action if the providers did not cut bills by 25 percent.
The last auction of the 600 MHz spectrum raised C$3.5 billion ($2.87 billion) for the government.
The companies have defended themselves, saying the prices they charge are falling.
Some 23 bidders including regional players such as Cogeco and Quebec’s Videotron are participating in the process. Shaw Communications did not apply to participate due to a $16 billion takeover bid from Rogers. Lawmakers and analysts have warned that market concentration will intensify if that acquisition proceeds.
In May, after Canada’s telecoms regulator issued a ruling largely in favour of the big three on pricing for smaller companies’ access to broadband networks, internet service provider TekSavvy withdrew from the auction, citing the decision.
Some experts say the government has been trying to level the playing field with its decision to set aside a proportion of spectrum in certain areas for smaller companies.
Gregory Taylor, a spectrum expert and associate professor at the University of Calgary, said he was pleased the government was auctioning off smaller geographic areas of coverage.
In previous auctions where the license covered whole provinces, “small providers could not participate because they could not hope to cover the range that was required in the license,” Taylor said.
Smaller geographic areas mean they have a better chance of fulfilling the requirements for the license, such as providing service to 90 percent of the population within five years of the issuance date.