TORONTO Feb 19 Canada's auction of prized
wireless spectrum could generate much more money for the federal
government than anticipated, industry analysts said on
The results of the auction of licenses for 700 megahertz
spectrum, which is valued for its ability to carry signals over
long distances and to allow signals to penetrate buildings, will
be revealed by the government at 1700 EST (2200 GMT) on
The lack of interest in the auction by any major foreign
telecom players, and late withdrawals by small domestic
companies had spurred speculation that bidding would be subdued.
Some analysts are now re-thinking that scenario, however.
They say the big three domestic players, Rogers Communications
Inc, Telus Corp and BCE Inc's Bell
Canada, along with large regional players such as Quebecor Inc's
Videotron, may have bid up prices in a narrowed
playing field to try to secure the airwaves that will allow them
to build more powerful mobile networks.
Despite "an absence of foreign bidders and a contraction in
domestic participation, the government may have stimulated just
enough competition to boost auction proceeds above market
expectations," National Bank analyst Adam Shine said in a note
to clients on Wednesday.
Some analysts projected in January that the auction would
bring in between C$1.5 billion ($1.37 billion) and C$2.5 billion
for the government, much below original expectations. This
followed the late withdrawal of a key player, upstart telecom
Wind Mobile, after its main backer, Vimpelcom Ltd,
Shine said he now believes that the auction is likely to
have raised twice his initial forecast of C$2.5 billion on the
back of Quebecor having bid on spectrum outside of its home
province of Quebec.
That view was echoed by Canaccord Genuity analyst Dvai Ghose
and other industry sources, who spoke on the condition of
anonymity because of the sensitive nature of the process.
Ghose said he now anticipates proceeds from the auction of
C$3.4 billion to C$5.7 billion, up from his previous forecast of
C$1.5 billion to C$2.5 billion.
Rogers and Quebecor did not respond to requests for comment
on their bidding strategies. But as bidders, the companies are
barred from such discussions by the auction rules.
Shares of Canadian telecom companies were little changed in
early trading on Wednesday, ahead of the auction results.