Verizon is taking a closer look at expanding in to the Canadian wireless market.
On Verizon’s earnings conference call yesterday, Verizon Communications CFO Fran Shammo stated that the wireless company is still interested in moving in to Canada. Calling is an “exploratory exercise,” Shammo indicated that the company is focusing on the area between Quebec and Toronto.
“If you look at the population of Canada, about 70 percent of that population is between Toronto and Quebec. That’s adjacent to the Verizon Wireless properties,” Shammo said. “Again, if you look at the spectrum auction, it mirrors up exactly with what we launched here in the United States on the 700MHz [frequency].”
We have been hearing rumblings that Verizon is in talks to purchase WIND Mobile or Mobilicity. Verizon currently has over 100 million subscribers and had $20 billion in revenue last in the U.S. last quarter. They certainly have the infrastructure and finances to quickly move in and expand on any existing Canadian wireless company. Canada has delayed a spectrum auction until January of 2014, giving Verizon time to make a move. The goal would be to purchase a smaller Canadian carrier like WIND or Mobilicity, then purchase enough spectrum in the auction to begin major expansion. The Canadian government changed regulations last year, allowing a non-Canadian company to own any Canadian carrier that has less than 10% market share. WIND Mobile currently has around 600,000 subscribers. The three big wireless carriers in Canada are Rogers, Telus, and Bell. Those three companies hold roughly 90% of the market share, with smaller companies like Mobilicity and WIND Mobile making up the other 10%.
There are several regulatory hurdles that Verizon would have to overcome before completing any merger. Their partnership with Vodafone could pose problems, as well as laws and regulations with both the Canadian and U.S. governments. Shammo wrapped up his response this way:
“So again, cautiously looking at it, not ready to make any announcements today and we continue to explore and have discussions, but at this point it’s just really just an exploratory exercise.”
Verizon is not the only U.S. wireless carrier that is looking to expand into international markets. AT&T has been exploring options as well, after their bid to purchase T-Mobile was rejected by U.S. regulators.
What do you think Canadian readers? Would you be open to Verizon or AT&T attempting to expand into your area?