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7/24/2008
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Canadian Spectrum Auction Opens: More Services, Lower Prices

Most of the new spectrum was gobbled up by traditional providers Rogers Communications, Bell Canada, and Telus.

After the conclusion of the $4.25 billion Advanced Wireless Services Spectrum Auction in Canada this week, subscribers have been told to eventually expect to get some new mobile phone service providers that will help spur a nationwide drop in prices and more services.

While most of the new spectrum was gobbled up by traditional providers Rogers Communications, BCE (Bell Canada), and Telus, at least two new providers are planning to enter the market aggressively.

Most attention has centered on Globalive Wireless Management, which committed $442 million in the auction. Noting that Canadians currently pay considerably more for mobile wireless services than Americans while missing out on many advanced mobile services, the company served notice that it plans to compete aggressively against the entrenched firms.

"This is an historic event for wireless users across the country," said Anthony Lacavera, chairman and CEO of Globalive, in a statement. "It marks a new era of choice in Canada's wireless world."

According to media reports, Globalive is expected to spend another $2.5 billion in building out its network.

Another successful bidder of spectrum was Data & Audio Visual Enterprises Wireless (called DAVE), which bid $243 million for spectrum. DAVE, which counts Microsoft co-founder Paul Allen among its investors, hasn't revealed details on its planned deployment, but the presence of Allen and New York-based Quadrangle Group and its $6 billion in assets under management indicate that the partnership has the financial horsepower to be a significant player in Canada.

The large incumbent wireless providers shelled out enough money in the auction to protect their dominant positions. Rogers, which has a contract with Apple to market the iPhone, spent $999.4 million in the auction, while BCE's Bell Mobility spent $740.9 million and Telus spent $879.9 million.

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