2014-01-24 00:39:09 - Recently published research from Business Monitor International, "Canada Telecommunications Report Q1 2014", is now available at Fast Market Research
The list of confirmed participants for the 700MHz spectrum auction to be held in January 2014 was confirmed during this quarter but revealed no new interested parties, contrary to the hopes of the Canadian government. Laws regarding spectrum transfers, foreign ownership, network sharing as well as the dominance of the country's top three operators has created an unattractive environment for potential investors. BMI had been sceptical a fourth player would emerge in the 700MHz auction, and we believe this could lead to the government relaxing its stance on spectrum transfers, allowing consolidation among smaller players. The potential acquisition of Mobilicity by WIND Mobile could prove to be a test case for this, as we have long-held that the smaller players
could rally around WIND as a potential challenger to the dominance of Telus, Rogers and Bell Canada. These newer, smaller players have experienced virtually no success with their low-cost prepaid business models, however, there are opportunities that could be attractive to a larger WIND company; high instances of higher value postpaid subscriptions and ARPU growth suggests there is a demand for 3G and 4G services in the country.
Full Report Details at
- www.fastmr.com/prod/763945_canada_telecommunications_report_q1_2 ..
* All the major mobile operators including Telus, Bell Wireless, Rogers Wireless and MTS Mobility all reported net mobile subscriber additions in Q313, as growth looks to pick up over the second half of the year, in line with our expectations following market contraction in Q113. The principal operators - including regional players MTS and SaskTel - continue to roll out 4G services based on LTE technology. Although they remain reluctant to disclose adoption rates, continued growth in the number of smartphone and tablet users suggests they would be unwise to curtail 3G/4G investment any time soon.
* New data from MTS suggests the fixed voice market was smaller than we had originally believed and caused us to downgrade our forecasts for the service in this update.
* The data available regarding the development of the broadband and pay-TV markets, from selected operators is on track with our forecasts for the 2013-2017 and we have left them unchanged.
Key Trends & Developments
Canada's fourth largest mobile operator, WIND Mobile, has submitted a bid for Mobilicity, believed to be about half of the CAD380mn (US$357mn) offer made by Telus in May 2013. Telus' bid was subsequently blocked by Industry Canada on concerns regarding competition, leaving the door open for one of the country's smaller operators or an international investor to rescue the embattled minor player. While the government of Canada will likely block any deal that will result in one of the big three mobile networks acquiring Mobilicity, this is not likely not to be the case with a WIND takeover. The mobile operator is in court administered administration and is looking for a buyer by end 2013. However, its radio spectrum cannot be transferred to any other firm until February 2015. 'We will not approve any spectrum transfer request that decreases competition in our wireless sector to the detriment of consumers,' Jake Enwright, press secretary to Industry Minister James Moore, said.
In November 2013, Industry Canada has announced the final list of 12 qualified bidders for the upcoming 700MHz 4G mobile licence auction in the country. The auction is expected to be held on January 14 2014. The qualified bidders are Bell Canada, Rogers Communications, Telus, MTS, SaskTel, Catalyst Capital Group, TbayTel, Videotron, Wind Mobile, Feenix Wireless, Eastlink and Novus Wireless. All the bidders have paid their pre-auction deposits in full. However, by December, Catalyst Capital Group decided to withdraw from the auction process for unknown reasons.
In October 2013, Telus agreed a deal to acquire smaller mobile player Public Mobile for an undisclosed sum. Public Mobile is believed to have around 280,000 customers and in June the company was acquired by a group of private equity companies. Unlike its planned takeover of Mobilicity, the acquisition of Public Mobile has been approved by Industry Canada and the Competition Bureau, as of December, as this transaction does not materially change the spectrum concentration of incumbents. Public Mobile's frequencies were not part of the spectrum auction reserved for newcomers (unlike Mobilicity) and Telus expects to use the acquired operator's PCS G block spectrum for mobile broadband.
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