Canadian carriers pay big for mid-band 5G spectrum licenses

Innovation, Science and Economic Development Canada's 3,500 MHz 5G spectrum auction concluded with record numbers on July 29. Fifteen Canadian mobile carriers collectively paid CA$8.91 billion for 1,495 licenses, nearly three times the amount raised in a 600MHz spectrum auction in 2019.

The Big Three carriers - Bell, Rogers and Tellus - won the majority of licenses. Rogers won 325 licenses for CA$3.3 billion, Bell won 271 licenses for approximately CA$2.1 billion, and Telus won 142 licenses for CA$1.9 billion. Overall, the Big Three accounted for 82 percent of the total amount raised.

Due to differing licenses, regional carriers such as Crown-owned Saskatel and rural Quebec-based Sogatel also managed to purchase their own licenses. SaskTel paid CA$145 million for 68 licenses, while Sogetel paid $14.5 million for 18.

Mid-band 5G spectrum in the 3,500 MHz range can carry far more data than 4G LTE or even 600 MHz 5G spectrum. The high bandwidth and low latency can drive the next generation of remote use cases in addition to rich media.

According to ISED's deployment guideline, winners must deploy services on their newly acquired spectrum to meet five-, seven-, ten- and 20-year targets. The higher the population density of the region, the faster and more widely the services must be deployed. In areas with large population centers such as Toronto and Vancouver, licensees will be required to serve at least 30 percent of the population within five years, 50 percent within 10 years, and 70 percent within 20 years.

Operators of 4G networks in urban areas will have to follow an accelerated 5G schedule. They must serve at least 90 percent of that population within five years, and 97 percent within seven years, and 95 percent of the surrounding rural area within 10 years. In non-urban areas, a target of 90 per cent in seven years and 97 per cent in 10 years has been set.

Ontario-based TechSavvy had originally planned to participate, but withdrew at short notice after the CRTC reversed its 2019 wholesale internet pricing decision. Shaw's Freedom Mobile also did not participate due to Shaw's pending merger with Rogers.