Canadian telecom companies shell out $2.1 billion for 5G

Canadian telecom companies recently spent a combined $2.1 billion on 5G bandwidth in the country’s spectrum auction. The event, which featured 22 telecom providers bidding on licenses for wireless spectrum, will have implications for future prices and the quality of mobile phone and internet plans. Execulink Telecom Inc., a smaller provider, acknowledged that their inexperience and budget posed challenges compared to larger players. However, they formed a consortium with Nexicom Inc. and Wightman Telecom Ltd. and won 38 licenses at a cost of $17.7 million.

The auction focused on the 3,800 MHz spectrum band, which is considered ideal for 5G services and rural internet connectivity. This mid-band wireless frequency can carry a lot of data over long distances. Gregory Taylor, an associate professor at the University of Calgary, stated that deploying 5G on this frequency provides a reasonable alternative to the initially hyped lightning-speed service. Canadian telecom companies have been lagging behind their U.S. counterparts in terms of 5G speeds due to spectrum availability, and acquiring licenses in the 3,800 MHz band will help them catch up.

Telus Communications Inc. acquired the most licenses in the auction, followedBell Canada and Rogers Communications Inc. Videotron, which recently purchased Freedom Mobile, spent almost $300 million to secure licenses with the goal of becoming a fourth national carrier. However, smaller providers face challenges in outbidding the larger carriers and building out functional, affordable networks. The government’s rules for the auction included a spectrum cap to reserve some spectrum for smaller competitors.

While the cost of spectrum may lead to higher mobile prices, it will also fund initiatives to help rural Canadians, Indigenous Canadians, and those with affordability challenges access reliable service. The auction was an important step to promote competition in the wireless services market, but smaller providers often struggle to compete with the big carriers. Overall, the auction results will shape the future of Canada’s mobile and internet landscape. OPP Today