Verizon holds fire on Canadian acquisitions

Verizon holds fire on Canadian acquisitions

15 AUG 2013
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Verizon Communications is delaying its potential acquisitions of Canadian operators Wind Mobile and Mobilicity until after January’s spectrum auction, according to The Globe and Mail.

Sources said the number one US operator is also deciding whether to take part in the auction for 700MHz spectrum before the 17 September application deadline.

Firms interested in taking part in the auction are forbidden from negotiating with other potential bidders until next year. If Verizon was to win spectrum, it could renew its interest in Wind and Mobilicity once the restrictions are lifted.

However, the report suggested the delay could also mean Verizon has lost interest in entering the Canadian market or wants to drive down the prices for the two mobile firms it has courted.

The Globe and Mail reported in June that Verizon had made a $700 million preliminary offer for Wind Mobile and was in talks with Mobilicity, which has been put up for sale by parent VimpelCom.

Canada’s three major operators BCE, Telus and Rogers Communications are concerned about Verizon’s possible entry into the market. According to Bloomberg, the three companies have held private talks with the Canadian government about the threat posed by US firms entering the market.

In an attempt to create a fourth nationwide operator, the Canadian government last year changed its regulations to allow full foreign ownership of operators that have less than a 10 per cent market share.

BCE said in July that the government decision to block the country’s big three operators from buying smaller domestic players would allow Verizon to acquire them for a lower price. Another concern relates to the government reserving airwaves for new entrants and requiring incumbents to open the networks for use by competitors — giving the likes of Verizon an unfair advantage.

Market leader Rogers has also been attempting to outmanoeuvre Verizon by backing private equity bids for Wind Mobile and Mobilicity.

According to GSMA Intelligence, Rogers had 9.4 million connections at the end of Q2 2013, with BCE and Telus both having around 7.8 million. With just 28.6 million connections in the whole of Canada, the three operators hold 87 per cent of the market. Wind Mobile has around 695,000 connections, while Mobilicity has 356,000.

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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