MONTREAL – Thanks to technological advances (the gear is smaller and cheaper) and regulatory breaks (the rules are newcomer-friendly), Canadians may see additional wireless companies in the market pretty quickly once new spectrum is assigned, says a new report from the Seaboard Group.
The advanced wireless spectrum auction gets under way May 27 for the 1710-1755 and 2110-2155 MHz (AWS) frequencies but what’s still unknown is how much the eventual spectrum winners will have to spend – and how fast they can get going.
Estimates have been all over the place, with some saying it may take well over a billion dollars to build – and that it may take 18 to 24 months to get going.
According to a Seaboard report released today, however, “the estimates of how much will need to be spent, and how long it will take for new entrants to launch seem inflated. We expect that many commentators may have been unduly influenced by incumbent thinking. Our research suggests that many estimates have missed the mark.”
The research and consulting company says the time needed to construct and turn-up a new network may take less than 12 months and that $500 million might do the job of network-building.
After talking with network vendors and potential subcontractors, Seaboard says that technology has advanced so far and engineering has improved so that “signaling and radio gear that once filled a room and needed a crane to install now is the size of a compact washing machine (and moves on wheels),” reads the report.
“Importantly too, the regulatory climate has shifted. Industry Canada’s new conditions of tower-sharing and mandatory roaming have really changed the game. New entrants, having deployed their own systems to meet the roaming thresholds will have true national coverage on the first day – the new entrant coverage maps will be identical to incumbent coverage maps.”
Of course, notes the report’s authors, spectrum costs, marketing budgets and back office system costs would all be additional to that $500 million in infrastructure costs.
“But we also point out that it is entirely possible that the infrastructure costs could be a shared cost – several new entrants might elect to share physical facilities such that they can focus their energies and resources on building brands rather than filling the Canadian landscape with more towers,” reads the report.
