Canada’s telecommunications companies spent $8.9 billion to buy licenses for 5G wireless spectrum, with Rogers Communications (TSX:RCI.B) spending the most to defend its market leading position.
Toronto-based Rogers spent $3.3 billion in the government’s 5G wireless spectrum auction, while BCE (TSX:BCE), the parent company of Bell, spent $2.1 billion and Telus (TSX:T) paid $1.9 billion, according to a statement by the federal government in Ottawa.
The three telecom companies dominate the sector, with more than 10 million wireless customers each.
Spectrum is never cheap, but the amount paid for 5G is far more than what analysts had expected, another sign that so-called midband frequencies are viewed as crucial by wireless companies seeking to establish an edge in 5G services.
A U.S. midband auction earlier this year saw more than $80 billion U.S. in spending, led by Verizon Communications (NYZE:VZ) and AT&T (NYSE:T). Investors had anticipated that the overall figure in the latest Canadian spectrum auction would be $5 billion to $6 billion.
Quebecor (TSX:QBR.B) spent $830 million in the auction, including parts of western Canada, where it doesn’t compete today. Cogeco Communications (TSX:CCA), a regional cable provider that doesn’t currently sell wireless services, spent $295 million in the auction. Its licenses cover its home province of Quebec, as well as the Greater Toronto Area.
Rogers is awaiting regulatory approval of its proposed $20 billion acquisition of smaller rival Shaw Communications, which was announced in March. Shaw (TSX:SJR.B), through its subsidiary Freedom Mobile, is Canada’s fourth-largest wireless provider and didn’t participate in the spectrum auction.
