Nov 17, 2000 12:00 PM,

A Northern play

Lynnette Luna

Sprint PCS is embarking on a larger international strategy that could give Sprint PCS a footprint throughout North America and Mexico

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The company has registered to participate in the Jan. 15 Canadian auction of PCS spectrum. However, Canadian law limits foreign participation in the telecommunications market to 33.33%. The CDMA operator is looking for Canadian partners.

"We can bid and then there is a time period during which we have to develop a consortium," said a Sprint PCS spokeswoman who declined to name any potential partners for Sprint PCS. "There would be various equity investors that would create a distinctive Canadian enterprise through which we can offer services."

Sprint applied under the name Nova Scotia Co., an entity that is owned by Sprint PCS Canada Holdings Inc., and anted up a $78 million deposit. In addition, six other entities registered to participate in the auction, including four incumbent operators. Industry Canada, the government agency in charge of auctioning the spectrum, noted that the list of registered bidders in no way implies each have been approved as qualified bidders. Industry Canada is in the process of reviewing each application.

A successful entry into the Canadian market would likely be similar to Sprint PCS' presence in Mexico. The carrier earlier this year invested $200 million into Pegaso. Its investment includes a governance role for Sprint PCS on Pegaso's board, and the two carriers have a preferred roaming agreement that enables cross-boarder roaming. Bernie Bianchino, former chief business development officer with Sprint PCS, was appointed CEO of Pegaso in July.

Analysts who cover the Canadian telecommunications market believe the government may eventually relax the 33% cap on foreign owners as international companies, primarily U.S. entities, are beginning to find the Canadian telecommunications market an attractive piece to their international portfolios. AT&T Corp. and British Telecommunications plc last year acquired one-third of Canadian TDMA operator Rogers Cantel for $934 million and a 31% stake in AT&T Canada last year. GSM operator VoiceStream acquired a 15% stake in Canadian GSM operator Microcell Telecommunications earlier this year.