OTTAWA – Despite an auspicious beginning, the Advanced Wireless Spectrum auction that began this week still has the ingredients for “both a robust auction process and a more competitive marketplace thereafter,” predicts the SeaBoard Group in a white paper released Wednesday.
The SeaBoard Group contends that Canadians have not lost the promise of more choice in cell phone providers and of lower cost services because of the seeming bidder disarray. It points out that 24 of 29 new-entrant bidders remain in the race.
The research firm predicts that Videotron and MTS Allstream, now bidding on its own, will bid for licences across the country, while Shaw will focus on British Columbia, Alberta, Saskatchewan and Manitoba, where it has cable properties. It also says that Globalive will try to pick-off cities where Yak services already have legs, and that SaskTel, TBTel, EastLink, WestMan, and SSI Micro will concentrate on areas appropriate to their geographic interests.
The SeaBoard Group groups the bidders into four tiers, likening the players to sports teams – Major League teams (Rogers, Bell, Telus, SaskTel, MTS Allstream), Minor League teams (Shaw, Videotron, EastLink, MTS Allstream out of its territory), A Farm teams (Globalive, M/C Ventures) and B Farm teams (DAVE, Novus, Triple Five).
Rogers, Bell, Telus, SaskTel and MTS Allstream are big leaguers because they are incumbent wireless operators with extensive national or regional operations and bundle opportunities. The minor leaguers have limited wireless experience, but with existing customer bundle opportunities.
“Even tier B (minor leaguers) will profit from cooperation with other tier B, or even tier C companies (the farm teams),” states the SeaBoard Group, which adds such discussions are prohibited during the auction process. The research firm expects these types of discussions to emerge once the auction has been completed.
The auspicious beginning to the auction included the disqualification and withdrawal of five new-market-entrant bidding groups, and the reorganization of the bid of a six.
Last week, the MTS Allstream-backed wireless consortium collapsed, the Quebec Court of Appeal asserted the rights of bondholders trying to block the BCE ownership transfer, and Mipps Inc. (Primus) and 6934570 Canada (Columbia Equity, M/C Venture Partners and Novacap) withdrew from the auction process.
“That the continued ownership interregnum is a distraction to BCE is an understatement,” notes the SeaBoard Group.
