TORONTO, OTTAWA, WINNIPEG and REGINA — Signalling its exit from the wireless network market in the prairie provinces, and just days after it made the original applications, Wind Mobile’s proposed sell-off of AWS-1 spectrum to Manitoba Telecom Services (MTS) and SaskTel was approved by Industry Canada on Friday.
In separate announcements, MTS said it will pay $45 million to buy 15 MHz of paired AWS-1 spectrum in Manitoba from Wind Mobile, while SaskTel will acquire six licences of paired AWS-1 spectrum in Saskatchewan for an undisclosed sum.
Industry Canada approved the two spectrum licence transfer deals Friday morning, publishing its separate decisions for Wind Mobile’s licence transfers to MTS and SaskTel on its website.
Announcing the two deals with MTS and SaskTel on Friday, Wind Mobile CEO Alek Krstajic indicated his company would now focus its resources on providing strong competition in the other markets in which it still holds spectrum — namely, Ontario, British Columbia and Alberta.
In a press release outlining the MTS deal, Krstajic was quoted as saying the spectrum transfer agreement was “exciting for Wind customers and for Canadians”.
“These sale proceeds, including our recent spectrum acquisitions from Rogers as well as the AWS-3 spectrum auction, will be used towards network expansion and quality improvements including the LTE rollout,” Krstajic said in the MTS news release.
“The increased range of services and choices being made available to Canadians through wireless providers like MTS and Wind Mobile are further evidence of the benefits of greater competition that has resulted from the federal government’s continued efforts to create a more level playing field, and we thank them for that,” Krstajic added.
In a press release announcing the spectrum transfer deal with SaskTel, Krstajic added: “It’s also good news for Canadian wireless users broadly speaking, because it shows that providers like SaskTel and Wind Mobile are providing true alternatives for consumers, thanks in large part to the federal government’s dedicated efforts to ensure that there is real competition in the wireless sector.”
SaskTel president and CEO Ron Styles was also quoted in the press release, saying: “We are extremely pleased that the federal government has approved this spectrum licence transfer between two of the carriers that fulfill the role as the fourth competitor to the Big Three national carriers in their respective markets. This transaction will support more competition in the wireless market and allow both SaskTel and Wind to provide better service to our customers.”
Styles added that SaskTel’s 4G LTE network in Saskatchewan’s nine major urban centres operates on the AWS-1 spectrum band and these additional blocks of spectrum will allow SaskTel to deliver significantly more bandwidth and faster speeds.
In the case of Manitoba, the spectrum acquisition from Wind, along with spectrum purchased by MTS in the federal government’s auction earlier this year, will allow MTS “to significantly increase the speed and customer experience on the MTS wireless network to the benefit of many Manitobans,” MTS said in its press release.
“This deal is great news for our Manitoban customers as the use of mobile video increases. We are excited to be taking a big step to improve the wireless experience for our fellow Manitobans and to focus our resources right here at home,” Jay Forbes, MTS Allstream CEO, said in the news release.
MTS said the $45 million it will pay to Wind Mobile for the AWS-1 spectrum licences will be financed using existing credit facilities which it plans to repay following the sale of Allstream. On Thursday, Manitoba Telecom Services announced it is looking to find a buyer for its Allstream subsidiary during the second half of 2015.
Putting the spectrum transfer deal between Wind and MTS into perspective, market analyst Sanford Lee at Canaccord Genuity Corp. emailed an analysis statement to Cartt.ca today, saying it was widely assumed previously that Wind would not launch wireless service in Manitoba.
“With the transfer of Wind’s spectrum to MBT (Manitoba Telecom Services, MTS’s parent company), this means that Wind has relinquished its option to launch wireless services in Manitoba. While this is theoretically positive for MTS Mobility, the market widely assumed that Wind had no plans to enter the province, anyway,” Lee wrote, adding that no new entrants will launch in Manitoba for the foreseeable future.
Lee went on to suggest that “some may conclude that by allowing Rogers to acquire Mobilicity and Shaw’s AWS-1 spectrum and now MBT’s acquisition of Wind’s new entrant spectrum, Industry Canada has opened the door for a potential acquisition of MBT’s MTS division by BCE, Telus or Rogers.”
However, Lee said, even with the transfer of Wind’s spectrum to MBT, there are still four wireless competitors in Manitoba — MTS Mobility and the Big Three national wireless incumbents.
“We believe the government would block an acquisition of the MTS division by BCE, Telus or Rogers due to wireless concentration issues,” Lee wrote. “According to the CRTC, at the end of 2013, MTS Mobility had a 51% wireless subscriber share, RCI (Rogers Communications) 33%, Telus 10% and Bell 6% in Manitoba. Therefore, an acquisition of MTS Mobility by one of the national incumbents would lead to a player with 57-84% wireless share in Manitoba. We do not believe that this would be in the interest of the government or Manitobans and would be inconsistent with the government’s policies to promote wireless competition.”
