Verizon Communications may be coming north of the border. The Globe and Mail reports today that the U.S.-based carrier has cast its eye on WIND Mobile, one of Canada’s smaller carriers. Discussions are still at an early stage though. So far, only “exploratory talks with investors” have been held between the two companies. According to one source, “They [Verizon] are definitely taking a hard look right now.”
WIND Mobile is not Verizon’s only door into the Canadian market. It could instead acquire Mobilicity, which recently saw its deal with TELUS collapse after the Canadian government refused to support it.
Either move would likely be welcome by the Canadian government which continues to push its vision of having at least four carriers in every regional market. It changed foreign ownership rules to allow non-Canadian companies to take over carriers with a market share below 10%. Both WIND Mobile and Mobilicity fall in that category.
The acquisition of either carrier would also allow Verizon to participate in the 700MHz spectrum auction set for early 2014. Having reported wireless revenues of nearly $20 billion in the last quarter alone, Verizon certainly has the pockets to be a credible bidder in the auction. With its 100 million subscribers, it also has the heft to take on Canadian incumbent carriers in price wars to grow its subscriber base.
Verizon may not be alone at looking at Canada’s smaller beleaguered carriers. The report adds that U.S.-based AT&T, Britain-based Vodafone, and Norway’s Telenor could also enter the Canadian market as investors. A Canadian-only option could also still happen with Catalyst Capital Group having expressed interest in creating that fourth national carrier.
As for Verizon, this would not be its first Canadian venture. It was a major shareholder in TELUS until 2004.
Source : The Globe and Mail