Canada's big wireless companies spend nearly $9B on new 5G spectrum - CBC.ca | Canada News Media
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Canada's big wireless companies spend nearly $9B on new 5G spectrum – CBC.ca

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The federal government raised $8.9 billion in a licence auction for a key band of 5G wireless spectrum in results announced after the close of markets Thursday.

Canada’s Big Three wireless companies led the pack, grabbing hundreds of licences for the 3,500-megahertz band of airwaves.

The 3,500 MHz band of spectrum will be important because carriers are using it as a building block for their 5G networks. More equipment for carriers and smartphone hardware is expected to work with that frequency band.

Midrange bands like 3,500 MHz are useful in both urban and rural areas because they have the ability to travel considerable distances and pass through buildings.

“The 3,500 MHz auction is a key step in our government’s plan to promote competition in the telecom sector, improve rural connectivity and ensure Canadians benefit from 5G technologies and services,” said François-Philippe Champagne, the minister of Innovation, Science and Industry, in a statement.

WATCH | What is spectrum and how does it affect your cellphone?

Ever wonder what wireless spectrum is, and why the government auctions it off from time to time? Then check out this, our helpful explainer 1:28

“As intended, small and regional providers have gained access to significantly more spectrum, meaning that Canadians can expect better wireless services at more competitive prices, which has never been more important for working, online learning and staying connected with loved ones.”

As well as Rogers, Bell and Telus, carriers gaining licences include Videotron, Xplornet and SaskTel.

Rogers won 325 licenses, the largest amount, paying a clock price of $3.3 billion that will allow them to provide service to 34 million people.

The company said its investment will allow it to reach 99.4 per cent of Canadians with 5G.

“This investment in 5G spectrum will build on our existing 5G assets and enable us to deliver the world-class connectivity Canada needs to increase productivity, fuel innovation, create jobs and compete in a global economy for decades to come,” said Joe Natale, president and CEO of Rogers Communications, in a statement.

“We went into this auction with a clear plan and acquired the spectrum we need to continue driving the largest and most reliable 5G network in Canada and to deliver long-term value for our customers, shareholders and Canada.”

The band of wireless spectrum auctioned off was the 3,500 MHz band, which is critical for 5G networks for moving large amounts of data quickly. (Francisco Seco/Associated Press)

Videotron purchased 294 licenses, Bell received 271 and Telus won 142. Xplornet received 263 licenses.

Quebecor Inc., the parent company of Videotron, said its investments in the 5G auction were another step in its expansion outside of Quebec. It said more than half of the investments are concentrated in southern and eastern Ontario, Alberta, Manitoba and British Columbia.

“This major investment paves the way for large-scale projects in Quebec and other Canadian provinces in the coming years,” said Pierre Karl Péladeau, president and CEO of Quebecor.

“Our success in Quebec has served Quebecers well. Today we are taking another step toward bringing leading-edge technology and healthy competition to more Canadian consumers.”

Freedom Mobile, the country’s fourth-largest cell service provider, chose not to participate in the auction amid a takeover deal of its parent company Shaw Communications Inc. by Rogers that is awaiting regulatory approval.

The United States held a similar auction last year, raising $4.5 billion US in net proceeds. Ottawa’s $8.9 billion far outstrips the $3.5 billion raised in a 2019 spectrum auction for a different, less desirable wireless band.

In total, 1,495 out of 1,504 available licences were awarded to 15 Canadian companies, including 757 licences to small and regional providers across the country.

National and regional carriers collectively spend billions of dollars at auction to obtain licences for the spectrum they use for wireless service.

The 5G-compatible licences will allow more voice, video and data to be shared between smartphones or with other devices.

The auction was originally scheduled to take place last year but was delayed six months due to the COVID-19 pandemic.

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Netflix’s subscriber growth slows as gains from password-sharing crackdown subside

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Netflix on Thursday reported that its subscriber growth slowed dramatically during the summer, a sign the huge gains from the video-streaming service’s crackdown on freeloading viewers is tapering off.

The 5.1 million subscribers that Netflix added during the July-September period represented a 42% decline from the total gained during the same time last year. Even so, the company’s revenue and profit rose at a faster pace than analysts had projected, according to FactSet Research.

Netflix ended September with 282.7 million worldwide subscribers — far more than any other streaming service.

The Los Gatos, California, company earned $2.36 billion, or $5.40 per share, a 41% increase from the same time last year. Revenue climbed 15% from a year ago to $9.82 billion. Netflix management predicted the company’s revenue will rise at the same 15% year-over-year pace during the October-December period, slightly than better than analysts have been expecting.

The strong financial performance in the past quarter coupled with the upbeat forecast eclipsed any worries about slowing subscriber growth. Netflix’s stock price surged nearly 4% in extended trading after the numbers came out, building upon a more than 40% increase in the company’s shares so far this year.

The past quarter’s subscriber gains were the lowest posted in any three-month period since the beginning of last year. That drop-off indicates Netflix is shifting to a new phase after reaping the benefits from a ban on the once-rampant practice of sharing account passwords that enabled an estimated 100 million people watch its popular service without paying for it.

The crackdown, triggered by a rare loss of subscribers coming out of the pandemic in 2022, helped Netflix add 57 million subscribers from June 2022 through this June — an average of more than 7 million per quarter, while many of its industry rivals have been struggling as households curbed their discretionary spending.

Netflix’s gains also were propelled by a low-priced version of its service that included commercials for the first time in its history. The company still is only getting a small fraction of its revenue from the 2-year-old advertising push, but Netflix is intensifying its focus on that segment of its business to help boost its profits.

In a letter to shareholder, Netflix reiterated previous cautionary notes about its expansion into advertising, though the low-priced option including commercials has become its fastest growing segment.

“We have much more work to do improving our offering for advertisers, which will be a priority over the next few years,” Netflix management wrote in the letter.

As part of its evolution, Netflix has been increasingly supplementing its lineup of scripted TV series and movies with live programming, such as a Labor Day spectacle featuring renowned glutton Joey Chestnut setting a world record for gorging on hot dogs in a showdown with his longtime nemesis Takeru Kobayashi.

Netflix will be trying to attract more viewer during the current quarter with a Nov. 15 fight pitting former heavyweight champion Mike Tyson against Jake Paul, a YouTube sensation turned boxer, and two National Football League games on Christmas Day.

The Canadian Press. All rights reserved.

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