In what is viewed as a blow to the government's attempts to encourage competition, Globalive's Wind Mobile has pulled itself out of the running from a major auction of the wireless spectrum in Canada, Reuters reported. The withdrawal is seen to bolster the prospects of the three big companies that control the telecom sector in the country.
A new player in the Canadian market, Wind said this week that it would not be pushing through with the auction after Vimpelcom Ltd, its main investor, decided that it would not be financing its entry in the auction.
The report said the development spells good news for BCE Inc's Bell, Rogers Communications Inc and Telus Corp, the largest telecommunications firms in Canada. They will be taking a major share of the sought-after spectrum at a price that is much lower than what might otherwise be asked of them.
In particular, the 700 MHz spectrum is valued for its ability to transmit signals over long distances as well as its capability of being able to go through thick walls. The spectrum is useful for deployment in both urban and rural areas, the report said.
The Conservative government of Canada had looked forward to the auction to support its efforts of having four robust mobile phone service providers in each region who fill fight for subscribers and in the process reduce prices. With Wind's withdrawal, the prospect of strengthening the existing operators and raising a lower amount from the auction is now imminent. The government was looking at the auction to increase its coffers as it heads into the federal polls set for next year, the report said.
The report quoted Canaccord Genuity Analyst Dvai Ghose as saying that the auction's proceeds would most likely be lower than his previous forecast of C$2.5 billion or $2.3 billion.
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