In Canada, one mobile operator drops, another increases in 5G spectrum auction

Say goodbye to freedom and hello to Videotron?

Canada has just completed a critical auction of 5G spectrum for C-band waves, dedicated 5G waves that could dramatically speed up phones or provide a new option for home internet. And aside from the Big Three, all of which have taken new paths for their information superhighways, there are two other companies that you’ll be hearing more about in the next few years.

The auction offered 200 MHz of waves with a guarantee that 50 MHz would go to operators outside of the big three. Most of this money was taken by Videotron and Xplornet, with Videotron committing to expand its cell phone service outside of Quebec and Xplornet saying it is focusing on rural broadband.

This navigable map shows several of the areas where Videotron and Xplornet have purchased spectrum. It doesn’t include all markets, as I haven’t had time to find latitude-longitude pairs in Tableau, but it gives you a good picture.

With 1.5 million wireless customers in Quebec alone, Videotron is the fourth largest wireless service provider in the country. CEO Pierre Karl Péladeau clearly states that the company now intends to offer wireless service in other provinces: “Our success in Quebec has served Quebecers well. Today, we are taking another step forward in bringing advanced technology and healthy competition to more Canadian consumers. . “

Rural-focused carrier Xplornet bought the most waves outside of the big three. The company says it will use them to “provide fast, reliable and affordable unlimited broadband service to rural Canadians.” This may be underestimating his plans. Yes, Xplornet didn’t catch waves in Toronto, Montreal, or all of British Columbia. But he bought some in the two big cities of Alberta; the two cities of Saskatchewan; Winnipeg; and mid-sized Ontario cities like Guelph.

This graph shows how the new airwaves were distributed between carriers in Toronto and surrounding areas.

This graph shows how the new airwaves were distributed between carriers in Toronto and surrounding areas.

If Xplornet really focuses on “unlimited broadband service”, however, it may not use that spectrum to become a big player in mobile telephony. The 3,500 MHz airwaves can also be used to provide home internet access, and they can be much more effective when targeted point-to-point as a home internet service than when trying to cover the country. with mobile coverage. Xplornet’s 50-80 MHz spectrum across Saskatchewan, for example, could make it a major player for ISPs.

The biggest winner of the auction was Bell, which together with Telus will be able to extend its spectrum leadership in the 5G era.

“With our strong position in the 3,500 MHz spectrum, we are poised to push the nation’s top-rated 5G service even further, leveraging all the capabilities of technology to help bridge the digital divide with access improved broadband for more rural and remote communities, ”said Stephen Howe, Bell’s chief technology officer, said in a press release.

Shaw withdrew from this auction, which means it won’t have the airwaves for Freedom Mobile to be a fourth independent national operator in the 5G era. The company is currently trying to merge with Rogers, but Videotron has also indicated that it would like the assets of Freedom Mobile. (More info below on how Shaw could continue to offer competitive service, if it wanted to.)

This map shows many, but not quite, the spectrum wins in this auction. I grouped Bell and Telus, and Rogers and Videotron, side by side in similar colors so you can see how much spectrum they would have if they shared:

Virtual carriers become a wildcard

You need at least 40 MHz of spectrum to provide competitive service, preferably much more. Bell, Telus, and Rogers all offer 80-100 MHz services right now, and they’ll have more after that. A new player with much less spectrum will find themselves stuck in this Wind / Freedom trap of inadequate performance.

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The CRTC provided a potential way out in a decision in April, where he said large operators would be required to share their networks in places where regions have spectrum. But I couldn’t understand what the CRTC meant by “locations where regions have spectrum”, in terms of market by market or province-wide.

If it’s market by market, roughly only Shaw, Videotron and Xplornet could offer wireless service nationwide. If it’s province-wide, you might see new services from Eastlink, Cogeco, Sogetel, TBaytel and others; they all bought small amounts of spectrum in this auction. Purely virtual operators like Mint Mobile are always excluded, unless they partner with one of the spectrum owners.

In any case, that’s why you see Videotron buying small amounts of spectrum in places like Toronto and Niagara Falls. There is no way he can have a viable service on 20 MHz of spectrum in Toronto. But it could certainly have a viable service if the other carriers are forced to share their networks because Videotron has spectrum there.

There are other jokers in the deck. Videotron has a long-standing relationship with Rogers in Quebec, and it has sold spectrum to Rogers before; the two could team up to share spectrum in the rest of Canada, much like Bell and Telus do. It would also improve Rogers ‘service and could solve Rogers’ problem of always being behind Bell in terms of spectrum in Eastern Canada. In this auction, Rogers continued, but that did not fully balance the scales.

We’ll be traveling across Canada in September for our annual Fastest Mobile Networks Canada project, which will bring you the latest news on the country’s 5G performance this fall.

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