Canada Industry Min Sees Wireless Competition,Lower Prices

OTTAWA -(Dow Jones)- Canadian Industry Minister Jim Prentice Tuesday predicted greater competition and lower prices in the wireless market in a year, after the government's auction of advanced wireless spectrum which saw the entry of several new players.

"...It will be approximately a year before we see new competition..." Prentice said at a news conference in Edmonton.

He said there is already "significant pressure" on prices and in anticipation of more competition "certainly I think there will be downward pressure on prices."

The auction, which closed Monday after 331 rounds, raised C$4.25 billion from 15 companies.

Rogers Communications topped the list with bids totaling C$999.37 million. Telus Communications was in second place with bids of C$879.89 million followed by Bell Mobility with C$740.93 million.

New entrants included Globalive Wireless and Data & Audio-Visual Enterprises Wireless. The government had set aside 40 megahertz out of the total 105 megahertz in the auction for new entrants.

Prentice said winners have to pay 20% of their bid price within 10 days and the balance in 30 days. They also have to comply with current Canadian ownership and control rules.

He said there are measures built into the auction rules to prevent so-called "spectrum hoarding." The licenses are for 10-year terms and winners are barred from selling them in the first five years to those who don't meet qualifications for new entrants, Prentice said. The government has conditionally assigned 282 licenses to the 15 companies.

Prentice said the success of the auction proves that there is room for growth in the Canadian market. He said Canada has fewer cellphone users than many other industrialized countries and its wireless market lags behind other countries.

Prentice also said the government will conduct an auction for what he referred to as the 700-series bandwidth in about 18 months.

-Nirmala Menon, Dow Jones Newswires; 613-237-0668; nirmala.menon@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 22nd July 2008