Sun. Mar 3rd, 2024

5G: anticipated reduction in service costs

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5G promised to deliver data transmission speeds 10 times faster than 4G and power the Internet of objects.

The Canadian Press

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The latest auction of the federal government's mid-band wireless spectrum bands, which concluded last month, will have positive effects on prices and the quality of Canadians' cellphone and Internet services, experts say.

The auction, the first since 2021, lasted a month. Twenty-two companies qualified to participate.

The federal government says it awarded 4,099 licenses during this auction which grossed about $2.6 billion. He said the 3800 MHz auction marked a key milestone in his plan to make spectrum available for 5G services and rural connectivity.

Gregory Taylor, an associate professor at the University of Calgary, argues that the deployment of 5G (fifth generation wireless communications) represents a good way to transfer data quickly.

He adds that these auctions allow the federal government to increase its revenues at a time when Canadians are seeking better, less expensive telephone services.

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This money can then be used to improve these services, particularly in remote regions.

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Gregory Taylor, an associate professor at the University of Calgary, believes that the deployment of 5G is a good way to quickly transfer data.

The deployment of 5G on the frequency of 3800 MHz is a reasonable solution, even if the connection will not be as fast as what was announced four or five years ago, Mr. Taylor further mentions.

Mark Goldberg, a telecommunications consultant, calls this solution perfect.

[This frequency] is neither too low nor too high. It provides good coverage and capacity. Our 5G networks are not as fast as those in the United States. The spectrum was blamed for this. This solution will allow service providers to largely catch up with their American competitors.

A quote from Mark Goldberg, telecommunications consultant

Telus Communications obtained the greatest number of licenses, according to preliminary results. In fact, it got its hands on 1,430 licenses for nearly $620 million. Bell Canada obtained 939 licenses for $518 million, followed by Rogers Communications, which invested $475 million to acquire 860 licenses.

Videotron, a subsidiary of Quebecor Media, which sought to consolidate itself as the fourth national operator after the purchase of Freedom Mobile, spent nearly $300 million to obtain 305 licenses.

According to John Lawford, general director of the Public Interest Advocacy Center, Videotron had to take risks and embark on a considerable investment to gain market share.

We could see more towers belonging to Videotron. This company will not have to enter into roaming agreements with Telus or Rogers in the West. It will be able to expand its activities more quickly in the West.

A quote from John Lawford, executive director of the Public Interest Advocacy Center

Several other small companies also participated in the auction, but Mr. Lawford believes that Videotron is the only one of the new arrivals that can really hope for a bright future.

Cogeco Communications announced an investment of $190 million to acquire 99 licenses.

The federal government said the auction was an important milestone in its plan to boost competition in the wireless services market. Gregory Taylor judges that this process benefits the largest providers, who can invest the most in obtaining licenses for their existing networks.

Smaller companies can't match the stakes. They can barely reach the initial bet. And are they really going to use these licenses or did they buy them so they can sell them later?

A quote from Gregory Taylor, associate professor at the University of Calgary

The challenge for smaller service providers is not just being able to outbid big companies, says Matt Hatfield, chief executive of OpenMedia, a lobby group that advocates for Internet access. Even when an independent company wins a license, the subsequent creation of a functional and affordable local network is often unrealistic.

Mr. Hattfield believes the easiest solution for these companies will be to keep their licenses for a while and try their luck. In three, five or seven years, they will be able to recognize their failure and say that the time has come to sell to Rogers or Bell, he says.

It is still unrealistic for a government to hope that smaller companies will be able to establish a network that can compete directly with the “Big Three”, he concludes.

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