The encyclopedia · Strategy & Leadership · Strategic decision · 2007–2008
Canada set aside spectrum for newcomers — and still raised $4.2 billion
Canada's 2008 AWS auction reserved 40 MHz for new entrants and raised about C$4.2–4.3bn, spawning five new wireless carriers — revenue traded for competition.
Industry Canada
the move
Canada's wireless market was dominated by three national carriers. In November 2007 Industry Minister Jim Prentice announced an auction framework that reserved about 40% of 105 MHz of AWS spectrum exclusively for new entrants, with mandated roaming and tower-sharing to make entry viable.
The auction ran in mid-2008, ending after weeks of bidding with roughly C$4.2–4.3 billion raised for the government. Five new companies emerged positioned to launch services, including Globalive's Wind Mobile.
Academic analysis (Hyndman & Parmeter, Production and Operations Management 2015) later estimated the set-aside cost the industry about 10% of profits in their model — the price paid for creating real competition, which the paper framed as the auction's explicit objective.
why it works
- A set-aside guaranteed new entrants could win spectrum against deep-pocketed incumbents.
- Roaming and tower rules made entry economically possible, not just legal.
- The open 65 MHz kept revenue high even with 40 MHz reserved.
what transfers
When you want entry as well as revenue, do not just auction — reserve a slice for the outcome you want, then let competition price the rest.
what came after
Wind Mobile, Mobilicity, Public Mobile, Videotron and Eastlink entered the market; consolidation later folded several pure-play entrants into larger carriers, but the auction is still cited as a template for spectrum policy that trades some revenue for competition.
references
- Ottawa opens up wireless industry to more competition (CBC News, 28 Nov 2007)
- Cellphone market poised for shakeup as spectrum auction ends (CBC News, 21 Jul 2008)
- Efficiency or competition? A structural econometric analysis of Canada's AWS auction and the set-aside provision (POMS 24(5), 2015)
spotted an error? The archive wants to know.