Quebecor bulks up on spectrum
Company’s airwave acquisitions spur talk of national expansion
Quebecor Inc. snapped up blocks of coveted airwaves both in and outside its home province in the federal government’s latest spectrum auction, boosting its holdings by 28 per cent and fuelling conjecture that it will pursue its long-toyed national expansion plans.
The Montreal-based wireless carrier, which operates the Videotron brand, spent $187 million to acquire 18 licences to spectrum situated in cities in Quebec, Ontario, Alberta and British Columbia, according to provisional results of the country’s public auction for the 2500-MHz frequency band released Tuesday.
Quebecor will add this latest purchase to its arsenal of prized spectrum that already includes licences in B.C., Alberta and southern Ontario — places where the company has yet to deploy a network but could. Or, it could hold onto these dormant licences instead and attempt to transfer them to the highest bidder.
It hasn’t committed to one way or the other.
“For the spectrum we have acquired in English Canada, we are still analyzing various options that hold out prospects of very attractive returns, given the value of this strategic asset,” CEO Pierre Dion said in a news release. “We will continue patiently and carefully analyzing our options, it being understood that the financial and/ or operating conditions will have to fall within acceptable parameters.”
Telus Corp. was once again the biggest spender, paying $478.8 million for 122 licences in every service area where licences were up for grabs. The Vancouverbased incumbent bolstered its holdings by 37 per cent, securing “a sizable amount of spectrum across the country at a relatively cheap cost in terms of coverage area and population size,” Desjardins analyst Maher Yaghi said in a research note to clients.
BCE Inc.’s Bell Mobility unit spent $29.9 million and Rogers Communications Inc. paid $24.1 million for spectrum outside the big cities, an unsurprisingly low amount since they exceeded the holdings cap in 13 contested service areas in and around Toronto, Montreal and Vancouver before the auction began.
In an effort to strengthen competition, Industry Canada’s limit on how much spectrum licensees can possess in this frequency band relegated Bell and Rogers to the sidelines in many markets, sacrificing its own financial gain in the process.
The benefactors of this policy were the five other provisional winners: Bragg Communications Inc.’s Eastlink, Alberta-based Corridor Communications Inc., MTS Inc., TBayTel and Xplornet Communications Inc., the country’s largest provider of rural broadband.
“Can you imagine being excited to spend $25 million? It’s a lot of money,” Allison Lenehan, president of Woodstock, N.B.-based Xplornet, said in an interview, putting his small company’s big haul in context.
He credits Industry Canada’s spectrum aggregation limit and its decision to slice the service areas into smaller so-called “Tier 3” regions for making the company’s participation in this auction possible.
“The caps that were structured allowed smaller operators — not just mobile (cellphone) operators, but fixed operators — to go in and get access to spectrum that best suits their business,” Lenehan added.
Fledgling new entrant Wind Mobile Corp., which won big in March’s AWS-3 auction for bargain prices, was a notable absence on the winner’s list this time around.
Next, Ottawa will auction unallocated spectrum licenses from the recent 700 MHz and AWS-3 auctions, with sealed bids due from approved applicants on Aug. 6 by noon ET.