Telus 2007 Annual Report Download - page 28

28
Radiocommunications spectrum licences
TELUS holds radiocommunication spectrum licences and authorizations for a variety of
wireless services and applications, both mobile and fixed. TELUS holds significant 1.9
GHz PCS spectrum throughout Canada, is the leading holder of 800 MHz SMR/ESMR
spectrum in all of the major Canadian markets, and holds 25 MHz of cellular 800 MHz
spectrum in Alberta, B.C. and eastern Québec. In addition, TELUS holds various radio
spectrum licences for fixed services in the 2.3/3.5 GHz band throughout Canada, paging
services, analogue two-way radio services, and legacy mobile-telephone and other
miscellaneous wireless services.
Licence terms and renewals. Currently, spectrum licences in Canada for PCS and
cellular spectrum will expire in 2011 and 2013 (see “Management’s Discussion and
Analysis – Risk and risk management – Section 10.3 Regulatory –
Radiocommunications licences regulated by Industry Canada” and “Foreign Ownership
Restrictions” in TELUS’ 2007 Annual Report – Financial Review). The spectrum
licences for the auctioned 24/38 GHz, 2.3/3.5 GHz and PCS spectrum have a ten-year
term from the date of issuance. Most other radiocommunications spectrum licences are
renewed annually (see “Management’s Discussion and Analysis – Risks and risk
management – Section 10.3 Regulatory – Radiocommunication licences regulated by
Industry Canada” in TELUS’ 2007 Annual Report – Financial Review).
Upcoming spectrum auction. On February 16, 2007, Industry Canada released a
discussion paper for the upcoming auction for advanced wireless services (AWS)
spectrum in various spectrum bands. On November 28, 2007, the Minister released a
policy framework on how the auction will be conducted. The major elements include a
set aside for new entrants of 40 MHz of the available 90 MHz of AWS spectrum,
mandated roaming, and mandated tower and site sharing requirements at commercial
rates subject to binding arbitration. On February 27, 2008, Industry Canada clarified its
decision on roaming indicating that new entrants are required to build before roaming
and that resale will not be mandated, but rather left to commercial negotiations between
relevant parties. Terms of roaming and tower and site sharing will be based on
commercial terms and subject to binding arbitration where commercial negotiations are
not successful. Final conditions of licence were subsequently released on February 29,
2008. The auction is scheduled for May 27, 2008, with March 10, 2008 set as the
deadline for filing applications to participate. Shaw Communications Inc., Quebecor
Media Inc., Globalive Communications Corp., and a consortium of Manitoba Telecom
Services Inc., Canada Pension Plan Investment Board and Blackstone Group LP have
announced their intention to participate in the auction.
While the auction may provide opportunities for TELUS to increase capacity for
advanced wireless services, given the size of the set aside, the spectrum auction is
anticipated to result in the establishment of increased entry and competition on a
national and/or regional basis.
700 MHz Spectrum: The U.S. had a spectrum auction for the 700 MHz spectrum in early
2008, and the auction was ongoing as of March 13, 2008. This spectrum is currently
assigned to over-the-air broadcasters and is scheduled to become mobile in the U.S.
once broadcasters vacate these airwaves by February 2009. The CRTC has set a shut-
down date for analog television transmission in Canada by August 31, 2011. After this
date, no licences for analog transmission will be issued or renewed, thereby eventually