The Canadian wireless industry got a shock Thursday when the federal government announced that in order to increase competition a portion of the wireless spectrum coming available for auction will be reserved for new entrants in the market. Of the 105 Megahertz being auctioned off, 40 MHz will be reserved for new entrants.
Globe and Mail columnist Derek DeCloet looks at how self-serving the wireless industry’s claims of adequate competition were. The market seems to agree – share of Rogers Communications Inc., BCE Inc. and Telus Corp all fell Thursday.
However entry into a market where the big three already have 19 million subscribers will not be easy or cheap, with one cost estimate being between $1.5-billion and $2-billion on spectrum, equipment and startup losses.
My view is thatthe quickest way for a new competitor to make a splash is to license the iPhone for Canada and provide a cheap data plan for it. Based on events in the US tens or hundreds of thousands of people will switch to the new company.