Canada's wireless carriers saw their share prices drop an average of 10 percent after Industry Minister Jim Prentice announced that 40 percent of wireless spectrum set to be auctioned off will be reserved for new entrants. The three incumbents: Rogers Wireless, Telus and Bell Canada saw a total of $2.85 billion shaved off their market capitalizations. The regulators also decided that the incumbents would have to allow these new entrants to roam on their networks for between five and ten years.
"These auction rules are likely to enhance fears of aggressive new wireless competition across the country," said Vince Valentini, an analyst at TD Newcrest, in a note to clients. "However, we believe these fears will end up being overstated, as we see aggressive new competition being likely only in Quebec."
For more on Canada's carriers' woes:
- check out this article from the Financial Post