Industry awaits list of potential auction bidders on Monday

Canadian consumers and wireless industry players will finally find out Monday which companies have registered to take part in next year’s 700 MHz auction. That’s when Industry Canada will release its list of registered bidders.

Industry sources tell us they’re expecting some surprises.

Following a summer of intense speculation, we all know now that U.S. giant Verizon Communications Inc. won’t be on that list, as the company’s CEO declared over the Labour Day weekend that Verizon has no intention of coming to Canada right now, and that its potential interest in the market was “way overblown” by Canadian media this summer.

Likewise, Scotiabank analyst Jeff Fan said in a note this week that other leading U.S. providers AT&T Inc., T-Mobile USA, and Sprint did not apply to partake in the pivotal Canadian auction, for which applications and initial deposits were due this week.

We can also assume, of course, that Canadian incumbent carriers BCE Inc., Rogers Communications Inc. and Telus Corp. have submitted their applications and are already working on their bidding strategies in advance of the auction’s Jan. 14 start date. Canadian new entrants Wind Mobile and Eastlink (owned by Bragg Communications Inc.) have also said they’re in.

SaskTel (a provincial Crown corporation) and Manitoba Telecom Services Inc. will almost certainly be in the mix as they seek to gain more spectrum to expand their capabilities within their home provinces. Regional Canadian carrier Videotron Ltd. (a Quebecor Media Inc. subsidiary) should also be there, and northern startup Ice Wireless Inc. may be in the running.

Other potential bidders include a mix of Canadian and international providers, private equity players, and would-be strategic investors.

Dave Wireless Inc., which has struggled to gain customers since it entered the Canadian market under its Mobilicity brand in 2010, seems poised to sit this auction out unless its investors think they can protect their previous investments by acquiring more spectrum licences. They’d have to be willing to put up some cash as most providers are expected to spend hundreds of millions of dollars in the auction.

Then, of course, there’s the possibility that one or more of a dozen or so high-powered international providers will attempt to dive into the Canadian market, just as Egypt-based Orascom Telecom Holdings did in 2008 when it provided financial backing to Wind Mobile to acquire AWS airwaves during Industry Canada’s last spectrum auction.

British telecom Vodafone Group plc and Norwegian telco Telenor Group have apparently looked at the possibility of entering the Canadian auction.

Other international carriers that would have the size and capital to make waves in the Canadian market include América Móvil—the Mexican firm owned by Carlos Slim, who was rated the richest man in the world for much of the past five years—as well as Telefónica, S.A., from Spain, Orange S.A., from France, and Deutsche Telekom AG, from Germany.

On the private equity side, Thomvest Seed Capital Inc., joint-owner of Canadian new entrant Public Mobile Inc., seems likely to take part in the auction after its managing director said in June that Thomvest wants to become “Canada’s fourth wireless player.”

Birch Hill Equity Partners may also get in the game after it reported earlier this year that the firm was working on a deal to buy new entrants Wind Mobile and Mobilicity using money provided by Rogers.

Catalyst Capital Group Inc., another Toronto-based firm, may also be interested. Newton Glassman, the firm’s head, said May that he was considering a plan to operate a wireless carrier that would compete with the incumbents.

Paris-based Accelero Capital Holdings, owned by former Wind Mobile backer Naguib Sawiris, told The Wire Report this week that it won’t be taking part in the auction.

Privaty equity firms and other registered bidders could sign up for the auction as numbered companies, so it may not be immediately apparent who’s behind the names on the list.

Then there’s the role and long-term intentions of VimpleCom Ltd., the Amsterdam-based international carrier that has a 65 per cent non-controlling stake in Wind Mobile, and which is, itself, owned in part by Norway’s Telenor.

VimpleCom has said in the past that it would consider shedding its Canadian operation, which it acquired as part of its April 2011 purchase of Orascom, but with more than 209 million subscribers worldwide and more than $20 billion US in annual revenues, the company certainly has the size and scale to double-down on the Canadian market if it’s inclined. The company could very well be behind Wind’s financing for the auction, though if that was the case they could still sell the new entrant at a later date.

Monday could be the first hint of things to come. The Wire Report will, of course, provide full coverage of the auction list.