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Canada to reveal wireless spectrum auction results on Wednesday

By Alastair Sharp and Euan Rocha

TORONTO (Reuters) - The Canadian government confirmed on Tuesday that it has completed an auction of prized wireless spectrum and will reveal those results on Wednesday.

The 700 megahertz spectrum, which is valued for its ability to carry a signal over long distances and to penetrate buildings, will be used by Canada's big wireless companies and some smaller ones to build more powerful mobile networks.

Canada's Industry Minister James Moore, in a brief statement late on Tuesday, said the results would be announced in Ottawa at 5 p.m. EST on Wednesday, confirming an earlier Reuters report that the auction had ended and results were imminent.

When the auction kicked off last month, the withdrawal of one smaller player led to expectations that bidding would be subdued.

But Dvai Ghose, an analyst at Canaccord Genuity, said on Tuesday he expects the auction to bring in more than C$2.5 billion ($2.3 billion) for Ottawa.

Ghose said he understood that leading wireless company Rogers Communications Inc had to pay more than initially expected to secure the airwaves it desired and that Quebecor Inc's Videotron had bid on airwaves outside of its French-speaking home base of Quebec.

Ghose's assumptions, based on his own industry checks, were echoed by one other equity analyst and an industry source, who spoke on the condition of anonymity because of the sensitive nature of the process.

Rogers and Quebecor did not immediately respond to request for comment on their bidding strategies. But as bidders, the firms are barred from such discussion under the auction rules.

LATE WITHDRAWAL BY WIND

The airwaves auction was expected to bring in between C$1.5 billion and C$1.8 billion for the government, telecom analysts had estimated, following the late withdrawal of a key player, the upstart Wind Mobile, after its main backer Vimpelcom Ltd pulled funds.

The bidders included dominant national wireless providers Rogers, Telus Corp and BCE Inc's Bell as well as regional operators focused on the provinces of Quebec, Manitoba, Saskatchewan and elsewhere.

The auction split the country into 14 regions, with seven spectrum blocks in each. But four of those blocks were most coveted because they are aligned with U.S. airwaves used by AT&T Inc and Verizon Communications Inc.

Rogers, Bell, and Telus were restricted to bidding on one of those prime blocks apiece in each region, part of a government plan to encourage more competition in the industry.

Ottawa will hold another auction, for airwaves in the 2,500 MHz range, next year and is also moving to force telecom companies to offer domestic roaming to rivals at the same price they offer it to their own customers.

Separate from the auction, the federal government must also at some point decide whether to allow Telus or another company to acquire struggling Mobilicity, and whether Rogers can also buy airwaves that Quebecor and Shaw Communications acquired in a 2008 auction but never used.

($1 = 1.0957 Canadian dollars)

(With additional reporting by Randall Palmer in Ottawa; Editing by Jeffrey Hodgson and Lisa Von Ahn)

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