Wireless competition for the Big 3

Ottawa announced today that it will hold an auction of the wireless spectrum in May of next year.  Industry Minister Jim Prentice told a press conference in Toronto that 105 megahertz of spectrum will be sold to bidders – forty megahertz of which will be set aside for newcomers and be unavailable to the Big Three. This move should result in more competition and lower cellphone rates for Canadians in coming years. The big winner will be new Internet services that require broader spectrum.

Canadians have been paying more for wireless service than mobile users in other countries for years and finally the government is taking some action that should bring down rates. Of course, the auction promises to fill government treasury coffers with some serious cash as well.

Rogers Communications, Bell Mobility, and Telus have expressed concern in what they consider government intervention but these special concessions to help new entrants will be welcomed by consumers nationwide. Increased competition and new brands should increase churn rates for the Big 3, force marketing costs of acquisition per subscriber to be higher, and lower average revenue per user.

Prentice also announced that cellphone tower sharing will now be mandated forcing companies to allow other companies to use their towers at commercially negotiated rates.