ISED, the Canadian spectrum regulator, initiated a process to sell a set of spectrum licenses in a “residual” auction, i.e. an auction of licenses left over after the initial auction. The format will be a sealed bid, second price combinatorial auction for markets where more than one block is available. This provides some opportunity for interesting potential discounts from as-bid prices.
The Items, The Rules and The Bid Process
There are 41 licenses available in 32 Tier 4 service areas in the 3.5/3.8 GHz band, 37 of which are 3.8 GHz licenses leftover from the 2023 auction. This includes multiple blocks in major markets: Vancouver, Edmonton, Calgary, Winnipeg, and in a number of other smaller areas.
There are also 38 licenses available in the 2.3 GHz band. The 2.3 GHz licenses, one block per market, are expired licenses of TELUS. The licenses are in smaller markets across the country, with TELUS retaining the band for use elsewhere.
Applications are due on December 2, 2025 and bids are to be submitted on January 27, 2026. The total spectrum awarded in the two bands, the 3.5 GHz band (from 3.45 GHz to 3.65 GHz) and the 3.8 GHz band (from 3.65 GHz to 3.9 GHz), amounts to 450 MHz of all exclusive high-power spectrum in 10 MHz blocks.
There is a cap of 100 MHz of spectrum currently in place per operator across the 3.5 GHz and 3.8 GHz bands following the last auction in 2023. No MNO currently has more than 100 MHz. There are 4 MNOs with that spectrum and each acquired licenses in both bands (3.5 GHz and 3.8 GHz) plus there are some fixed operators and one cableco that owns good spectrum in both bands as well.
ISED modified the cap rule for the new residual auction to allow for operators to hold more than 10 blocks, but only after May 28, 2029, roughly 3 years after they will have been paid by the winners. For a play in Western Canada and in other areas across the country, this auction represents a significant opportunity to add capacity in key markets. Services such as 5G Fixed Wireless Access (FWA) can greatly benefit from holding more than 100 MHz in these bands.
Next Steps for Spectrum Strategy
LYA is a leading consultant on spectrum matters to mobile operators and investors worldwide, for both mobile and satellite spectrum. Please reach out if there is an opportunity you would like to discuss. LYA supported clients in successfully acquiring licenses in both the 3.5 GHz and 3.8 GHz auctions, as well as in past residual processes using combinatorial bidding with second price award. We look forward to your comments.