TELUS Secures New 600 MHz Spectrum Licences
Posted by TELUS
TELUS announced the acquisition of new 600 MHz spectrum licences in B.C., Alberta, Saskatchewan, Ontario and Quebec at a cost of $931 million. These licences, equating to a national average of 11.3 MHz, will enable TELUS to deliver enhanced mobile broadband connectivity to its customers nationwide as the industry transitions from 4G LTE to 5G. Canadians today enjoy the second fastest networks in the world, behind only Norway, and TELUS has been recognized in Ookla’s analysis of Speedtest Intelligence data as having Canada’s fastest network.
“The acquisition and deployment of this spectrum is critical to the advancement of our national 5G growth strategy and to the global-leading network quality, speed and coverage we provide to Canadians,” said TELUS President and CEO Darren Entwistle. “As the demand for wireless data continues to grow, the acquisition of 600 MHz spectrum will enable TELUS to deliver enhanced urban and rural connectivity to our customers on Canada’s fastest and most reliable network.”
The 600 MHz band is important for its ability to travel great distances in rural areas and infiltrate barriers to better reach in-building locations such as elevators and parking garages, making it highly conducive to 5G deployment. TELUS’ 4G LTE network covers 99 per cent of Canada’s population, and the addition of 600 MHz spectrum will allow TELUS to increase urban capacity, while also expanding the rural availability of wireless broadband service. TELUS has invested more than $6 billion in spectrum-related costs since 2008, and over $54 billion in technology across the country since 2000.
Canada’s 600 MHz combinatorial clock auction included both open spectrum and 30 MHz set-aside. The set-aside, intended for newer service providers, effectively amounted to a subsidy for certain well-capitalized cable companies. The set-aside spectrum excluded national carriers, with those large cable companies being authorized to bid on both the set-aside and open spectrum. “TELUS secured the spectrum it needed in spite of the challenges given the set-aside design resulted in inflated pricing for the open spectrum blocks,” said Mr. Entwistle. “The average price per MHz-pop paid by the national carriers in the open auction was $1.08 higher on average than what was paid by those in the set aside, which equates to an approximate subsidy of $1.1 billion by Canadian taxpayers. Disappointingly, the design of the 600 MHz auction resulted in the highest prices paid for 600 MHz spectrum in the world. In the U.S., for example, providers paid on average $0.93 per MHz-pop. By contrast, Canadian national carriers paid on average roughly two times as much, at $1.89 MHz-pop.”
“The significant cost of spectrum negatively impacts our industry’s ability to provide the increased investment required to drive sustainable innovation, economic growth and better social outcomes including leveraging the power of digital technology to improve healthcare and educational outcomes,” concluded Mr. Entwistle. “In order to elevate our country’s competitiveness in the digital economy and alleviate income inequality for our citizens, we need world-leading technology and robust infrastructure from urban centres to rural regions; not limited by excess costs associated with major factors of production, including spectrum. Going forward, if we are to benefit all Canadians, accelerate the government’s innovation and affordability agendas, and transition successfully into a 5G world, the government of Canada’s policy objectives need to ensure a fair and economically sanguine framework for the upcoming 3500 MHz spectrum auction.”
Forward-Looking Statements This media release contains statements about future events, including with respect to spectrum deployment and network build-out plans. By their nature, forward-looking statements require the company to make assumptions and predictions and are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors (such as regulatory and government decisions, the competitive environment, our earnings and free cash flow, and capital expenditures and spectrum licence purchases) could cause actual future performance and events to differ materially from that expressed in the forward looking statements. Accordingly, this news release is subject to the disclaimer and qualified by the assumptions, qualifications and risk factors referred to in our Management’s discussion and analysis in our 2018 Annual Report, and in other TELUS public disclosure documents and filings with securities commissions in Canada (on SEDAR at sedar.com) and in the United States (the Electronic Data Gathering, Analysis, and Retrieval system, administered by the US Securities and Exchange Commission at sec.gov). The forward-looking statements contained in this news release describe our expectations at the date of this news release and, accordingly, are subject to change after such date. Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements.―CT Bureau
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