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Of spectrum and smart phones

It will come as no surprise that Canada's big three wireless network operators, namely Rogers, Telus and Bell, have the largest bar bills.


September 1, 2008  


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It was a busy summer in the Canadian wireless space and it is time for a recap.

First, the spectrum auction: When Industry Canada banged the gavel July 21st, it brought to an end more than 300 rounds of bidding that lasted almost two months and awarded approximately 280 licences to use the airwaves to 15 companies.

To make those payments, the winning companies needed to dig deep, as this auction raised some $4.25 billion for the federal coffers.

It will come as no surprise that Canada’s big three wireless network operators, namely Rogers, Telus and Bell, have the largest bar bills. Rogers’ bids alone represent almost a quarter of the auction tab, at $999.4 million. Telus won licences totaling $879.9 million, while BCE’s commitment was $740.9 million.

Those bills might have been higher, except that the government set aside spectrum for new entrants, which in this case meant, “anybody with money — except you three”. Among the winners:

• Printing and media company Quebecor Inc., which locked up spectrum across Quebec.

• A subsidiary of Globalive Communications Corp., the telecom company behind Yak Communications, which won bids in every other jurisdiction.

• Cable and communications company Shaw Communications Inc., which netted spectrum in Western Canada and Northern Ontario.

Each of these players has only just paid for the right to approach the bottom of the mountain that is Canada’s wireless market.

Ahead, they face an arduous ascent, made all the more treacherous by the big three companies who are well up the hillside and, no doubt, eyeing the landscape for loose boulders to roll down at the new climbers below. It might lead readers to wonder why anybody would take on such a climb. The answer is as plain as the palm of your hand, especially if it holds a Black Berry, iPhone or other smart wireless device.

The auction just completed awarded licences to offer broadband wireless data services in the 2 GHz band. It is expected the incumbent operators will use their new spectrum assets to add capacity to their existing networks and boost their wireless data transmission speeds to enable video, live television and other high-bandwidth applications.

New players will be trying to carve their own piece of that lucrative pie -and in the case of Quebecor, Globalive and Shaw, bundle their own wireless services with their existing communications offerings.

Unlike some spectrum awards in the past — such as the 24 GHz + 38 GHz auction in 1999 and the beauty contest that handed out 2.5 GHz MCS licences in 2001 — this time the equipment exists to take full advantage of the airwaves.

This summer, we’ve witnessed the introduction of the much-anticipated 3G (high speed) Apple iPhone and BlackBerry Bold from Research In Motion, plus smart phones from Samsung, Palm and HTC (among others) that have been touted as iPhone killers. Word is that RIM will launch its own touch-screen-driven iPhone killer -the BlackBerry Thunder -by year-end.

Whether these devices are enough to give new entrants a toehold on the mountain remains to be seen. The last time new entrants made a play in Canada was over a decade ago and we know how that turned out: Telus acquired Clearnet to take its regional wireless services national, while Rogers bought Microcell. Will we see a repeat of that experience? Time will tell.

While we are waiting, I encourage everybody with an iPhone (or an iPod Touch, for that matter) to check out the “Labyrinth” game. As the name implies, this application is a digital update of the classic game that required one to navigate a ball bearing through a maze full of sinkholes.

What I find most interesting about it is how it has taken advantage of the accelerometer built into these Apple devices: Players roll the ball bearing through the maze by tilting the device. It is not only a very cool time-waster, it is also an example of what happens when developers get creative with the devices on which their applications will run.

The mobile industry can only benefit when people think outside the box -and beyond the keypad.