Toronto is the most populous city in the country, so it’s no surprise it was the most expensive spectrum to buy in the AWS auction.
Bell paid $314 million for a 20Mhz “A” block licence, while Rogers paid the third highest, $297 million for identical spectrum for Toronto in the “F” block in different frequencies. Globalive paid the second-highest fee for a licence, $279 million for 20Mzh spectrum covering for all of southern Ontario in the “B” block restricted to new entrants. Presumably Globalive was willing to pay so much because this licence includes Toronto and its suburbs.
To get an idea of what was really valuable to the bidders, here are a few numbers: [Note: spectrum was divided into 20Mhz and 10Mhz alphabetical blocks covering provinces, regions and cities. Some had identical coverage areas but in different frequencies, so there were, for example, two 10Mhz licences available for Toronto, Montreal and over two dozen other cities. Some blocks were also restricted only for new entrants. Generally, 20Mzh spectrum is more desired than 10Mhz because more customers can be serviced.]
The fourth most expensive spectrum was a 20Mhz licence for Montreal (Rogers, $192 million), followed by 20Mzh for southern Quebec (Quebecor, $168 million), 10Mzh southern Ontario (DAVE, $131 million), 10Mzh Montreal (Bell, $128 million), two 20MHz licences for Vancouver (Telus and Rogers, $117 million in different frequencies), 10Mhz for southern Quebec (Quebecor, $112 million).
–The spectrum was also broken up into two types: 60 per cent of licences were open to all bidders (in blocks A, E and F), and 40 per cent of licences were open only to new entrants (blocks B, C and D). Anthony Lacavera, president of Globalive, was surprised that the prices of spectrum were close – only about a 16 per cent difference – in both groups.
It was expected that newcomers wouldn’t pay as much as the incumbents for equivalent spectrum. But Bell, for example, paid $128 million for the 10Mhz licence “E” block licence for Montreal, while new entrant Quebecor paid $96.6 million for the “D” block licence for the same city. Telus paid $103 million for the “E” block licence for Torontro, while Quebecor paid $96.4 million for the equivalent “D” block licence.
–There were two blocks of 59 20Mzh licences, both covering cities/regions and both open to all bidders. The incumbents literally shouldered the newcomers out. Rogers captured all the one of the “A” block, while Bell and Telus overwhelmed everyone in the “F” block. Telus was the lone outsider in the “A” block (Saskatoon), while Rogers was tolerated in the “F” block (mainland Nova Scotia). For comparison, the 20Mhz licence for Calgary in the “A” block was worth $54.1 million to Rogers, while Telus paid $57.4 million for its twin in the “F” block.
–The 10Mhz “E” block, open to all bidders, was also dominated by Telus and Bell. Of the 59 licences available here, only seven were captured by new entrants and none by Rogers.
— The least expensive licences were bought by Globalive, which paid $101,000 for the 10Mzh spectrum covering the Yukon, Nunavut and the NorthWest Territories in the “D” bock, and $104,000 for its sister spectrum in the “C” block. Globalive will have good coverage across the top of the country.
–There were billions of dollars put on the table, but some licences were apparently worthless. There were no takers for eight of them in the 5Mhz “I” block, which covers the 1670-1675 MHz frequencies. Industry analysts wonder what spectrum holders will do with these as there is a lack of handsets for this band. This unbought spectrum included southern Quebec and southern Ontario.
Still, six pieces of “I” block spectrum were bought. Bell paid $812,000 for the licence covering eastern Quebec, while the Novacap group paid $591,000 for the licence for Manitoba. This is spectrum buyers were caught with when the auction ended, or could be destined for backhaul.
