With last week’s announcement that Telus (NYSE:TU) has added Samsung to its 5G vendor roster, all three of Canada’s national wireless service providers, along with Rogers (NYSE: RCI) and Bell (NYSE: BCE), are underway with their 5G rollouts.
Rogers is the largest of Canada’s three national mobile network operators (MNOs). With its own network, the company covers 96 percent of the country’s 37 million population with its 4G/4.5G LTE network. At year-end 2019, Rogers served 10.8 million postpaid and prepaid subscribers.
The company was the first MNO to launch 5G in early 2020, in downtown areas of Canada’s major cities – Vancouver, Toronto, Ottawa and Montreal. Rogers expects to expand to over 20 more markets by the end of 2020, although given the COVID-19 environment, that may slip.
Rogers ramped its capex over C$1 billion a year in the past two years. Although the company withdrew its 2020 financial guidance due to COVID-19, expect overall capex to be down from 2019, but staying at capital intensity in the 16-17 percent range, indicating network expansion.
Rogers is leveraging its extensive spectrum holding for 4G LTE and 5G coverage. The initial 5G installations are operating on 2.5 GHz licensed spectrum that it already owns and uses today for its 4G/4G LTE services. The company will also deploy 5G in wide area applications in low-band 600 MHz spectrum that it holds across the country.
The company is expected to bid in the upcoming 3.5 GHz spectrum auction conducted by the federal government’s Innovation, Science, and Economic Development ministry. That auction, originally scheduled for late 2020, has been postponed to mid-2021 due to COVID-19 issues.
Rogers relies on Ericsson as its primary 5G equipment supplier and will take advantage of the Ericsson Spectrum Sharing capability to launch 5G on existing 4G LTE spectrum.
In early June, Bell announced its 5G launch will be available in Montréal, the Greater Toronto Area (GTA), Calgary, Edmonton and Vancouver. The company indicated its initial 5G service will expand to “more centers” across the country. From its central and eastern Canada stronghold, Bell will share Telus’ network in the western Canadian provinces.
Bell’s national 4G LTE network covers 99 percent of the population mainly in and around the AWS (1.7/2.1 GHz) band in cities and 700 MHz in rural areas. Bell is working with Ericsson and Nokia to buildout 5G ecosystem and will use dynamic spectrum sharing (DSS) capabilities to launch 5G on existing 4G LTE bands.
Bell also withdrew its 2020 guidance. Although Bell is Canada’s leading telecom company, wireless is the minor component of its overall operations. Its 2019 capex of C$697 million came in at a capital intensity level of less than 10 percent, indicating a maintenance mode level of investment. Expect capex to pick up through year-end 2020 but come in below 2019 levels.
On June 18, Telus announced that it is rolling out its first wave 5G network in Vancouver, Montreal, Calgary, Edmonton, and the GTA. The company plans to expand to 26 more markets across the country through year-end. Based in Vancouver, Telus shares parts of Bell’s network in eastern Canada on a reciprocal basis to serve its 10.2 million subscribers.
Telus delivers 4G LTE mainly on AWS and 700 MHz bands. It will utilize DSS for early 5G launches and build out 5G on low-band 600 MHz spectrum. The company is also testing 5G on 28 GHz millimeter wave spectrum for future deployments.
Telus invested C$889 million in 2019. For 2020, the company will likely spend around C$900 million at a capital intensity of 15-16 percent as it progresses with its 5G builds.
Samsung joins Ericsson and Nokia as Telus’ three 5G ecosystem equipment vendors.
Huawei is conspicuous by its absence in the Big 3’s 5G plans. The company is an incumbent for each MNOs 3G and 4G LTE networks but has been quietly eliminated from the supply chain as the MNOs made their picks for future network development.
by John Celentano Inside Towers Business Editor