MTS Allstream finally has the chance to become a true national wireless competitor and, along with
Canadian consumers, was the big winner in Wednesday's announcement on the new wireless spectrum
Industry Canada announced Wednesday that of the 105 megahertz (MHz) of new radio frequency it will
auction off for advanced wireless services, 40 MHz will be set aside for new entrants into the market.
competition is expected to bring prices down for consumers in Canada who pay much more that Americans
and Europeans for wireless phone services.
"Pierre Blouin (the CEO of MTS) is probably the happiest man in Canada," said Iain Grant, a
telecommunications consultant with the SeaBoard Group.
It creates a potentially transformative opportunity for MTS, the third-largest telecommunications company
in Canada, to launch a national consumer wireless service and truly compete with Bell, Rogers and Telus
across the country.
"One is always pleasantly surprised when government gets it right," said Chris Peirce, MTS Allstream's
executive vice-president government and regulatory affairs.
MTS still has plenty of work ahead of it. Other hopeful new wireless service providers like Quebecor, Shaw
and EastLink are also likely to bid for the new licences. The process will be made more challenging in that
potential new entrants will not be able to bid for a national licence but must acquire regional and
But MTS officials and industry observers applauded the federal government for not yielding to the
aggressive arguments from the incumbent national wireless companies -- Bell, Rogers and Telus -- who said
the auction should be completely open in the hopes of keeping new competitors out.
Peirce said in addition to a set-aside for new entrants, the spectrum auction process also mandates roaming -- enabling subscribers of one service to obtain services from another provider when travelling -- and shared
cellular tower provisions.
"The government could have put up a big stop sign that said there was no point in MTS bothering to try to
get into the business," Peirce said. "But instead, it is a green light."
Among other things, it will take hundreds of millions of dollars just to win the auction and then the
company will have to also invest many more millions in the operation and marketing of such a service. But
there are some who believe financing such a venture will not be a problem for MTS.
"Investment bankers will be filling up WestJet planes to Winnipeg to tell MTS executives how they can
make the financing available," said Grant.
Peirce said the company has a lot of work to do to prepare for the May 27, 2008 auction. He said all options
will be considered, including the possibility of partnering up with another company.
Eamon Hoey, a Toronto telecommunications consultant, said many scenarios are possible including the
entrance into the Canadian market of U.S. or international players as minority partners.
He also warned the "devil is in the details."
"Sure roaming and tower sharing was mandated, but the incumbents could still make it difficult and
expensive for the new entrants," he said.
Telus executive vice-president Janet Yale called the announcement "deeply disappointing news" because
she believes the smaller competitors would have joined the wider market regardless of whether the feds
-- with files from CP
What is wireless spectrum?
WIRELESS networks need access to radio frequency of a type that will allow devices that are transmitting
and receiving to use it while they are in motion. The upcoming option will include a 90-megahertz (MHz)
wide band for advanced wireless services that can be used for the roll-out of new services like mobile
wireless high-speed Internet, high-speed video, wireless e-mail devices like BlackBerries and faster access
Why is government auctioning it off?
THE airwaves are deemed to be valuable public property. The federal government is mandated to decide
how it is to be deployed, keeping in mind competitive and consumer needs.
Why is this a big deal for MTS Allstream?
THE Winnipeg-based telecommunications company only offers cellphone services in Manitoba.
Wednesday's announcement sets aside a certain portion of spectrum for new entrants into the national
wireless market -- including MTS.