Cheap cellphone rates next year?
It’s estimated that 6 out of 10 Canadians have a cellphone. It shocked me when I learned that the average Canadian pays about 33% more for their rate plan than the average American. High usage Canadians often pay 50% more than high usage Americans.
The federal government plans to auction off 105 megahertz of new wireless spectrum in a 3 week auction starting May 27th of 2008. Of the 105 megahertz 40 megahertz will be reserved for new providers to the Canadian broadband wireless market. The only catch is that the company has to be Canadian or has to partner with a Canadian company and has to have less than 10% in current market share. That means Rogers, Telus and Bell can’t have part of the 40%.
The federal government is hoping that larger companies like MTS Allstream and Quebecor will enter the wireless market. Quebecor has already indicated that it would like to invest $500 million to build a state of the art broadband wireless network. Toronto Hydro has also expressed interest in obtaining some of the spectrum.
What I find interesting is that newcomers to the wireless market will be able to roam through other carriers towers for at least 10 years with this new deal. This means that new carriers can take their time to build their own towers. This also means lower operating costs and cheaper rate plans. I would start my own broadband wireless company also if I could run most of it from my direct competitors equipment.
Canada’s three deep pocket wireless providers are Rogers, Telus and Bell. The larger spectrum means that bandwidth intensive technologies like video chat, mobile tv and perhaps even the Apple iPhone will be streamlined and readily available here in Canada.
Ultimately this will lower wireless rates making it more affordable for Canadian customers.
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