The FCC may have mandated a degree of open access and supported a possible shift to wholesale networks that could support multiple new operators, but north of the border, Canada is going further, setting aside a huge 40% of spectrum in the upcoming auction for new entrants. Shares in the three incumbents – Rogers Wireless, Telus and Bell Canada – saw a total of $2.85 billion shaved off their collective market capitalizations as their shares dropped by an average of 10% on the news. The regulators also decided that the incumbents would have to allow these new entrants to roam on their networks for between five and 10 years.
“These auction rules are likely to enhance fears of aggressive new wireless competition across the country,” said Vince Valentini, an analyst at TD Newcrest, in a research note. “However, we believe these fears will end up being overstated, as we see aggressive new competition being likely only in Quebec.”
Operators expressing interest included Quebecor’s Videotron cable division, long distance calling reseller Yak Communications, and Matthew Bassett, the son of late media pioneer John Bassett who founded CTV’s predecessor Baton Broadcasting.
Mandatory roaming will be effective as soon as a new entrant wins spectrum, analysts said.