OTTAWA - The federal government's spectrum auction is already having the desired impact of lowering prices in Canada's cellphone market, Industry Minister Jim Prentice said Tuesday on the first day of a weeks-long process that could introduce new competition.
The government is auctioning 105 megahertz of radio spectrum, which is used to carry the signals of cellphones.
The auction is expected to raise up to $1 billion for the government treasury and draw interest from the big three existing players in the market, Rogers Communications Inc, BCE Inc. and Telus Corp.
But because 40 MHz has been set aside for new entrants, Prentice says he is hopeful it will increase competition in Canada and lead to lower prices.
"Certainly it will have the effect of introducing more competition to the Canadian market place, there's no doubt about that," said Prentice.
"There are those who would say even to this point it has started to exert downward pressure on prices."
Independent market reports have placed Canada's cellphone market as among the least competitive and most costly to users in the industrial world.
Prentice said 24 bidders are in the auction, which will be conducted electronically, with the anticipation there will be many rounds. The department will table the results of each round on its website.
But a final determination of winners and losers may not be known for a month, he said.
Following the close of the auction, winning bidders will be required to submit ownership and control documentation and to complete various payment transactions within 30 business days, Industry Canada said.
The department will then review the information submitted by each bidder and issue licences as appropriate.
