Recap of the Canadian 3800 MHz C-band Spectrum Auction

By | December 1, 2023
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The 3800 MHz spectrum auction in Canada concluded with total proceeds of C$2.158 billion (US$1.6 billion) for a nationwide allocation of 250 MHz (link to results on ISED web site). To put this result in perspective, the 3500 MHz auction, which concluded in July 2021, raised C$8.91 billion for a nationwide average of 111 MHz.  The 3800 MHz spectrum fetched less than a quarter of the price, for more than twice the amount of spectrum (or more than 9x!).

Spending by service provider in the 3800 MHz auction
Spending by service providers in the 3800 MHz spectrum auction.

Making sense of the outcome

The 3800 MHz spectrum was not necessarily “cheap”. Rather, the 3500 MHz was significantly overpriced because the supply was limited. As a result, competitive bidding drove the price of 3500 MHz spectrum to unimaginable levels. A recap of some differences between the two auctions helps to highlight the effect of regulatory policy on the outcome:

  1. Amount of spectrum: The 3800 MHz auction offered 250 MHz versus a nationwide average of 111 MHz in the 3500 MHz auction.
  2. Set-aside spectrum: The 3500 MHz auction featured 50 MHz set aside for small and regional bidders in many markets (that is for any bidder other than the 3 national mobile network operators). This limited the amount of spectrum available to the national MNOs, and consequently led to price inflation.
  3. Spectrum cap: The 3800 MHz auction had a 100 MHz spectrum cap across both the 3500 MHz and 3800 MHz spectrum. This helped to lower the intensity of competitive bidding in areas where incumbents already hold spectrum (for instance, Bell and Rogers held about 50 MHz in most markets coming into the 3800 MHz auction).

The combination of these factors combined to lower the demand for 3800 MHz spectrum. Additionally, I would not exclude the impact of general macro-economic conditions. However, it is hard to judge that. On the one hand, the 3 largest operators reached their spectrum cap in most markets. This allowed many small bidders top acquire spectrum (20 of the 22 qualified bidders won spectrum). On the other hand, Videotron, in my opinion, fell short of the 100 MHz cap in many markets (Videotron had done well in the 3500 MHz auction where they benefited from the set-aside policy).

Low demand for spectrum in metro areas

Results point to low demand in metro and some urban areas (metro includes Toronto, Montreal and Vancouver). For instance, 40 MHz remain unsold in Vancouver. Moreover, the opening price for spectrum in metro areas combine to C$793 million, or ~39% of the clock round auction proceeds. These markets account for 40% of the population, and would typically disproportionally influence the outcome of the auction given their size. Therefore, we can conclude that demand for spectrum in metro and some urban areas was weak. Perhaps this should not be a surprise. Midband spectrum in built-up areas is a capacity layer for mobility services; and there are only a few large enough bidders who could afford it.

The contiguity issue

Sometimes auctions have a clear winner. This is not necessarily the bidder that paid the most, or the one that won most licenses. In this auction, Telus came out the biggest winner because it is the only bidder who came out with a contiguous allocation across the 3500 MHz and 3800 MHz bands.

Telus came into the 3800 MHz auction with much less 3500 MHz spectrum than Bell and Rogers who already had some 50 MHz allocation in most markets. Telus benefited from the auction structure to secure contiguous allocations in all markets (most of these at the 100 MHz cap). On the other hand, it was impossible for Bell and Rogers to win contiguous spectrum. This is significant because Telus will be able to deploy a single radio in this band, whereas Bell and Rogers would require two radios with carrier aggregation (they may get away with one radio, but this could prove challenging since the radios would need to support a wide bandwidth).

Canada combined 3500 MHz and 3800 MHz spectrum holdings

Service Area #Service Area NamePopulationABBBrBTCWCOGCOMCTETHuInIRMWNeNvNWRSTSoSSISSTbTTCVFVNVWIXPICTotal
4-077Toronto 7,030,750 01000007000000000001000000010000080000450
4-051Montréal 4,352,037 010000050000000000010000000100000100000450
4-152Vancouver 2,731,567 0100000000000000100100000001000001000040450
4-055Ottawa 1,452,852 010000050000000000010000000100000100000450
4-136Calgary 1,416,856 0100000000000000001000000010000010002030450
4-141Edmonton 1,325,857 0100000000000000001000000010000010002030450
4-030Québec 904,330 0100000200000000000100030000100000100000450
4-111Winnipeg 830,151 0100000000000000001000000010000010002030450
4-079Guelph / Kitchener 707,534 0100000200000000100010000000100000900300450
4-086London / Woodstock / St. Thomas 678,149 010000000000000400010000000100000800300450
4-154Victoria 458,861 010000000000000000100000001000001000050450
4-010Halifax 435,820 010010000000000000001000000010000000050450
4-090Windsor / Leamington 401,719 0100000700000000200010000000100000400200450
4-151Kelowna 362,815 010000000000000000100000001000001000050450
4-094Barrie 352,290 010000000000000000100000001000001000500450
4-084Niagara / St. Catharines 349,283 010000050000000000010000000100000400600450
4-125Saskatoon 306,824 010000000000000000100100000010000000500450
4-037Trois-Rivières 265,152 010000050000000000010005000070000300500450
4-124Regina 260,382 010000000000000000100100000010000000500450
4-001St. John’s 255,012 0100100000000000000010000000100000004010450
4-042Sherbrooke 250,227 01000005000000000001000000090000400700450
4-028Chicoutimi-Jonquière 218,377 010000020000000000010000000100000700600450
4-137Red Deer 206,387 01000000000000000010000000100000600900450
4-155Nanaimo 194,922 010000000000000000100000001000001000050450
4-132Lethbridge 189,709 01000000000000000010000000100000600900450
4-081Kincardine 185,818 01000200050002000010001000000010000000500450
4-100Sudbury 178,872 01007000000000000001000000010000000800450
4-018Moncton 178,500 01006000000000000001000000010000000900450
4-070Kingston 177,314 010000040000000000010000000100000400700450
4-074Peterborough 165,516 010000040000000010001000000090000400700450
4-017Fredericton 164,871 01006000000000000001000000010000000900450
4-050Joliette 161,106 0100000000000000001000100001000001000400450
4-019Miramichi / Bathurst 156,025 01006000000000000001000000010000000900450
4-072Belleville 154,982 0100000600000000100010000000100000400400450
4-003Gander / Grand Falls / Windsor 144,229 01008000000000000001000000010000000700450
4-015Saint John 142,898 01006000000000000001000000010000000900450
4-009Bridgewater / Kentville 139,289 01008000000000000001000000010000000700450
4-087Brantford 138,535 010000000000000400010000000100000500600450
4-014Sydney 131,379 0100100000000000000010000000100000004010450
4-128Prince Albert 130,446 01000000000000000010010000008000000700450
4-078Alliston 129,279 010000000000000200010000000100000400900450
4-092Sarnia 123,953 0100000800000000100010000000100000400200450
4-108Thunder Bay 121,061 010000000000000000100000010010000000500450
4-134High River 120,208 01000000000000000010000000100000600900450
4-156Courtenay 118,732 010000100000000000001000000010000050000450
4-044Drummondville 112,390 010000050000000000010003000080000400500450
4-023Matane 112,039 01000005000000000008000000100000600600450
4-148Grande Prairie 110,027 010070000000000000010000000100000100700450
4-131Medicine Hat / Brooks 107,233 01000000000000000010000000100000600900450
4-160Kamloops 106,972 010000000000000000100000001000001000050450
4-047Granby 105,440 010000050000000000010000000100000500500450
4-097North Bay 104,524 010000030000000000010000000100000007050450
4-114Brandon 103,743 01000000000000000010000000100000700800450
4-127Battleford 99,433 090000000000000009010000009000000800450
4-006Charlottetown 95,350 0100100000000000000010000000100000004010450
4-167Prince George 94,607 0100001000000000000100000001000001000040450
4-048St-Hyacinthe 92,092 010000020000000000010005000090000400500450
4-147Peace River 86,745 010000000000000000100000001000002009040450
4-082Listowel / Goderich 84,257 0100000050004000010001000000010000000500450
4-143Bonnyville 83,631 010040000000000000010000000100000200900450
4-026Rivière-du-Loup 82,869 010000020000000000010000000100000500800450
4-056Pembroke 82,200 010000020000000000010000000100000500800450
4-106Sault Ste. Marie 80,833 010000000000000000100000001000000050100450
4-150West Kootenay 78,941 0100001000000000000100000001000001000040450
4-004Corner Brook / Stephenville 77,974 010080000000001000001000000010000000600450
4-052Sainte-Agathe-des-Monts 77,087 01000000000000000010000000100000800700450
4-116Dauphin 75,508 01000000000000000010000000100000700800450
4-158Squamish / Whistler 74,365 501000000000000000080000001000001000020450
4-146Fort McMurray 73,953 0100000000100000000100000001000004006040450
4-013Antigonish / New Glasgow 71,445 01008000000000000001000000010000000700450
4-032Saint-Georges 71,425 010000070000000000010001000080000400500450
4-068Brockville 70,563 010000030000000000010000000100000400800450
4-067Cornwall 69,729 0100000600000000100010000000100000400400450
4-089Chatham 68,885 010000040000000000010000000100000300800450
4-169Dawson Creek 68,387 010000000000000000100000001000000010150450
4-073Cobourg 65,180 0100000500000000100010000000100000400500450
4-104Kenora / Sioux Lookout 64,826 010000000010000000010000001009000000500450
4-110Steinbach 64,764 010000000000000000100000001000200500800450
4-053Hawkesbury 64,131 010000020000000000010000000100000500800450
4-123Yorkton 63,024 01000000000000000010010000007000000800450
4-096Gravenhurst / Bracebridge 61,892 010000040000000000010000000100000200900450
4-149East Kootenay 60,371 0100001000000000000100000001000001000040450
4-049Sorel 58,740 0100000200000000000100050000100000600200450
4-063Roberval / Saint-Félicien 58,438 010000020000000000010000000100000700600450
4-112Lac du Bonnet 58,076 0100000000000000001000000010002001007050450
4-029Montmagny 56,808 0100000200000000000100010000100000500700450
4-040Victoriaville 56,684 0100000500000000000100010000100000300600450
4-011Truro 56,649 01008000000000000001000000010000000700450
4-025Rimouski 56,619 010000020000000000010000000100000600700450
4-166Skeena 56,234 0100001000000000000010000000100000001040450
4-008Yarmouth 55,609 0100100000000000000010000000100000004010450
4-121Moose Jaw 55,141 01000000000000000010010000009000000600450
4-138Wetaskiwin / Ponoka 54,340 010000000000000000100000001000002009040450
4-031Sainte-Marie 53,258 010000070000000000010001000080000400500450
4-113Morden / Winkler 51,609 0100000000000000001000000010002001008040450
4-133Stettler / Oyen / Wainwright 51,420 010020000000000000010000000100000400900450
4-088Stratford 51,339 010000005000000050001000000010000000500450
4-162Salmon Arm 51,024 010000000000000000100000001000005000100450
4-118Thompson 50,665 0100000000400000000100000001000003004040450
4-142Edson / Hinton 49,814 010000000000000000100000001000002009040450
4-095Midland 49,059 01000000000000000010000000100000700800450
4-054Mont-Laurier / Maniwaki 48,488 010000000000000000100000001000001000500450
4-007Summerside 47,557 0100100000000000000010000000100000004010450
4-065Port-Cartier / Sept-Îles 46,983 09000060000000000010000000100000500500450
4-093Strathroy 46,727 010000000000000400010000000100000001100450
4-122Swift Current 46,219 01000000000000000010010000007000000800450
4-119Estevan 46,006 01000000000000000010011000008000000600450
4-075Lindsay 45,902 010000040000000020001000000080000300800450
4-066Chibougamau 45,730 0100000000400000000100000001000005005010450
4-135Strathmore 45,478 010000000000000000100000001000002009040450
4-062Val-d’Or 44,619 010000000050000000010000000100000300700450
4-064Baie-Comeau 43,675 010000050000000000010000000100000500500450
4-058Rouyn-Noranda 43,108 01000000000000000010000000100000900600450
4-071Napanee 42,993 0100000200000000100010000000100000300900450
4-102Timmins 42,086 09070000004000000001000000010000000500450
4-034Thetford Mines 42,019 0100000200000000000100030000100000400600450
4-172Northwest Territories 41,668 080009000020002000005000000100000006030450
4-139Camrose 40,145 010020000000000000010000000100000400900450
4-164Williams Lake 38,440 4010000100000000000010000000100000500050450
4-103Kapuskasing 38,024 090100000000000000010000000100000005010450
4-024Mont-Joli 37,788 010000020000000000010000000100000600700450
4-168Smithers 37,646 01000010000020000000010000000100000001020450
4-129Lloydminster 37,539 0100200000000000000100000200100000200900450
4-085Haldimand / Dunnville 37,398 010000000000000002010000000100000800500450
4-130Northern Saskatchewan 37,064 01000000002000000007010000009000000700450
4-171Nunavut 35,975 0100000000400020000090005000100000002030450
4-170Yukon 35,928 08000900000002000007000000100000006030450
4-012Amherst 33,373 010010000000000000001000000010000000500450
4-144Whitecourt 32,669 010040000000000000010000000100000200900450
4-101Kirkland Lake 32,402 010010000000000000001000000010000000500450
4-057Arnprior / Renfrew 31,367 010000040000000000010000000100000300800450
4-083Fort Erie 31,072 010000050000000000010000000100000300700450
4-091Wallaceburg 30,983 0100000200000000000100000001000002001100450
4-080Fergus 30,010 01000000000000040001000000090000300900450
4-039Asbestos 29,744 01000005004000000000800300009000000600450
4-046Farnham 29,593 0100000500000000000100010000100000700200450
4-099COGliot Lake 29,520 010000000000000000100000001000000207060450
4-045Cowansville 29,083 010000050000000000010001000010000090000450
4-027La Malbaie 28,193 010000020000000000010000000100000600700450
4-005Labrador 27,656 010070000006000100000800000010000000300450
4-126Watrous 27,288 01000000000000000010010000008000000700450
4-157Powell River 26,865 010000100000000000001000000010000050000450
4-022Campbellton 26,776 01006000000000000001000000010000000900450
4-021Edmundston 26,504 01009000000000000001000000010000000600450
4-153Hope 26,093 010000000000100000010000000100000500090450
4-061Amos 25,096 040000000400000000100000001000007005050450
4-016St. Stephen 25,087 010040000000000000010000000100000001100450
4-020Grand Falls 24,936 01006000000000000001000000010000000900450
4-107Marathon 24,923 010000000010000000010000001009000000500450
4-033Lac-Mégantic 24,223 0100000200000000000100030000100000400600450
4-165Quesnel / Red Bluff 23,558 010000700000000000010000000100000001070450
4-145Barrhead 23,437 010040000000000000010000000100000200900450
4-120Weyburn 22,877 01000000000000000010012000008000000500450
4-035Plessisville 22,772 0100000200000000000100030000100000400600450
4-117Creighton / Flin Flon 22,228 010000000040000000010000000100000300800450
4-038Louiseville 21,708 010000080000000000010001000070000300600450
4-115Portage la Prairie 21,273 01000000000000000010000000100000700800450
4-098Parry Sound 21,123 010000020000000000010000000100000008050450
4-076Minden 20,813 0100000000001000000100000001000002009030450
4-105Iron Bridge 20,162 010000000010000000010000001009000000500450
4-109Fort Frances 20,095 080000000000000001000000501000050005020450
4-060La Sarre 19,349 01000000000000000010000000100000800700450
4-043Windsor 16,777 010000050040000000001000000060000400600450
4-036La Tuque 16,219 010000000030000000010005000010000000700450
4-059Notre-Dame-du-Nord 16,023 010000000000000000100000001000001000500450
4-159Merritt 15,649 2010000000000000000100000001002000300080450
4-140Vegreville 15,396 010040000000000000010000000100000200900450
4-002Placentia 15,304 01008000000000000001000000010000000700450
4-161Ashcroft 15,070 40100001000000000000100000001002000300050450
4-069Gananoque 13,150 010000020000000020001000000080000400900450
4-041Coaticook 12,981 010000050000000000010000000100000400600450
4-163Golden 6,854 01000010000000010000100000001000002003080450
Table legend:
AB: ABC Internet; B: Bell; Br: Bragg (Eastlink); BT: Bruce Telecom; CW: City West; COG: Cogeco; COM: Comcentric; CT: Cooptel; ET: ECOTEL; Hu: Huron Tel; In: Indigitel; IR: Iristel; MW: MPVWIFI; Ne: NE&W; Nv: Novus; NW: NWIC; R: Rogers; ST: SaskTel; So: Sogetel; SSI: SSI Micro; SS: Star Solutions; Tb: TBayTel; T: TELUS; TC: Thomas Communications; VF: Valley Fiber; VN: Vianet; V: Vidéotron; WI: Wire IE; XP: Xplore; IC: ISED (unsold)

Is consolidation possible?

The fragmentation of spectrum allocations across the 3500 MHz and 3800 MHz band could prompt some spectrum trading among operators. However, this could prove hard to realize on a wide-basis, especially in the urban areas, as operators have deployed some assets. In any case, it is something to look out for in the coming months.

Concluding remarks

The maps below show the combined holdings of some of the key players in this band. I believe looking at the two bands in conjunction is necessary, as opposed to each band alone. For additional information, download the brief by entering your name and email:

Xplore did not participate in the 3800 MHz auction, but they hold significant assets in 3500 MHz. Xplore assets do not reflect some licence transfers.