Paradigm Research sees upside/downside from wireless spectrum auction

At long last, there’s reason to be hopeful about improving the experience of Canadian wireless customers. And taxpayers have reason to be joyful as well.

Here is a short synopsis from Paradigm Capital’s research group:

“New Spectrum and New Carriers Create Opportunities for Equipment Vendors

Today marks the start of a significant wireless spectrum auction in Canada. A similar auction occurred earlier this year in the US, which raised $14b for the sale of prime wireless spectrum.
Over the weekend further details of the upcoming 3G license awardal in China were also revealed, which should lead to a massive upgrade of the largest cellular market in the world.

Auctions like this are occurring all around the world in a market with more than 3.4b cellular
subscribers and should lead to massive new upgrade opportunities for device and infrastructure vendors alike. The justification for these changes is to increase capacity and to increase the network speeds to accommodate “wireless data”. As a payload high speed data (now 7Mbps at its fastest) is almost a 1000 fold increase over the 9.6kbpos that was required for voice only cellphones just 10 years ago, which were also based on intermittent traffic not constant traffic as is true for data.

This (sic) changes paves the way for Research in Motion to continue its massive growth and presents similar opportunities for Sierra Wireless and others in the wireless data device business. These spectrums also ensure the continued evolution of the cellular network from HSUPA 7Mbps today to 14.4Mbps then 28.8Mbps and ultimately 50 or 100Mbps, which is ideal for companies that thrive on new technology providers like Sierra Wireless. We have already seen how this can change the competitive landscape and it seems probable that the likes of Apple and RIM will take huge market share from the legacy wireless voice leaders like Motorola and Nokia. We remain very bullish on wireless data companies, primarily Research in Motion (Strong Buy $166) and Sierra Wireless (Buy $37.50).”

MRM