The Ministry of Innovation Science and Economic Development (ISED) of Canada announced today that the 3500MHz 5G spectrum auction will be delayed by six months. Originally slated to start at the end of the year, the auction process will now begin on June 15, 2021.
A news release by ISED reasoned that the auction has been pushed back to “allow the telecommunications industry to maintain its focus on providing essential services to Canadians during the COVID-19 pandemic.”
Rules governing the auction have not changed. In total, there will be 1,506 licences up for bidding. The 200MHz frequency range will be chopped up and sold in 10MHz blocks across 172 tier 4 service areas.
“Canada’s telecommunications service providers are doing their part in this difficult time, providing essential services to keep Canadians connected as we face the realities of the COVID-19 pandemic together,” wrote Navdeep Bains, Minister of Innovation, Science, and Industry in the news release. “A number of providers have raised concerns, and the Government is implementing measures to address them. The Government will continue to reach out to telecommunications service providers—and to the private sector more broadly—to understand their challenges and support them to ensure that Canadians have access to high-quality networks and broad coverage at low prices.”
The delay could create a buffer period for telecoms to save up more cash for the auction. But Telecom Consultant Mark Goldberg pointed out that deferring payment to a later date without postponing the auction would achieve the same effect.
Not sure how delaying the auction contributes to helping sector "maintain its focus on providing essential services to Canadians during the COVID-19 pandemic", other than preserving cash.
A delay in payments would accomplish same without delaying spectrum use for more capacity https://t.co/uyxSqwkMhN
— Mark Goldberg (@Mark_Goldberg) June 5, 2020
While the six-month delay could give telcos more time to build out their infrastructure, it’s relatively short compared to the required service deadline. The Canadian government set a deadline for telcos to service a minimum percentage of the population over the spectrum blocks they’ve purchased after the auction. For tier 4 service areas containing a major population centre like Toronto, telcos are required to deliver service to 30 per cent of the population within 5 years and 70 per cent in 20 years.
Telcos across Canada are preparing to grab a slice of the valuable 3500MHz spectrum. Bell has recently sold off 25 data centres to Equinix to help finance the auction.
“Given the pandemic’s impact on Canadian society and overall business operations, we support the decision to provide additional time for the industry and the government to prepare for this auction,” said Chethan Lakshman, vice-president of external affairs at Shaw Communications in an email statement. “A well-run auction process will ensure that Canadians and the Canadian economy will benefit from strong competition in wireless and 5G for years to come.”
IT World reached out to several other carriers for comment, including Bell, SaskTel and Xplornet, but neither company was immediately available for comment.
