The federal government's $4.25 billion wireless spectrum sale will change Canada's cellphone industry forever, Industry Minister Jim Prentice said Tuesday.
Prentice said the auction was meant to help create more competition in the cellphone industry so that Canadians will see a reduction in costs and an improvement in services.
The minister said he's received estimates that it could take up to a year to see more competition hit the marketplace.
"But I certainly anticipate that at some time between now and that date that we will begin to see new competition in the marketplace," Prentice told reporters in Edmonton.
Prentice said the government has still not decided exactly what to do with the $4.25-billion windfall from the sale. However, he did say that Finance Minister Jim Flaherty has indicated that Ottawa's priorities include paying down the national debt and reducing taxes.
Fifteen firms took part in the sale, which lasted for 331 rounds of bidding over eight weeks.
Among the successful bidders was little-known Globalive Communications Corp., which sells Yak long-distance services in Toronto. The company spent $442 million to acquire licences to operate in provinces outside Quebec.
Shaw Communications Inc., mostly known in the western provinces, Quebecor Inc. and Bragg Communications Inc. were also successful bidders, hoping to broaden their networks.
Rogers spent more than any other firm, buying up $999 million worth of licences. Telus had C$879.9 million in standing high bids while Bell spent $741 million.
A portion of the spectrum was only available for new firms, so major companies like Rogers could not dominate the sale. Additionally, new market entrants cannot sell their spectrum licenses to the industry giants for the first five years of the 10-year term.
Quebecor's Videotron spent $555 million in licences in Quebec. It could now join forces with Globalive to create a national network.
Data & Audio-Visual Enterprises (DAVE) Wireless Inc., which is partly operated by Microsoft co-founder Paul Allen, also bid on $243 million worth of spectrum in Ontario, Alberta and British Columbia.
Prentice said the companies that bought spectrum are likely to put it to use and not hoard it since the licences are only valid for a decade.
With files from The Canadian Press
