Verizon

Verizon Delays Potential Acquisitions In Canada And Is Now Waiting For The Spectrum Auction In January

August 14, 2013 - Written By Leonardo Benveniste

Verizon has been talking about entering the Canadian wireless space for some time now, looking at WIND Mobile or Mobilicity to make a purchase that would grant them some spectrum and a user base in the neighboring country. Last year, the Canadian government changed the foreign ownership rules to allow outsiders to own a Canadian carrier if it has 10% market share or less.

Now it seems that an acquisition might not be so close. As MobileSyrup has noted, Globe and Mail is reporting that Verizon has suddenly “put off” any acquisition until the spectrum auction on January 14th and Verizon has time until September 17th to enter the auction by putting a refundable deposit. This would give more time to Verizon to decide whether they want to enter the Canadian market or not but if Verizon wins the auction, it could help them lower the price of Wind and Mobilicity. There have been reports that Verizon was offering $700 million for WIND Mobile, which included both their spectrum and the 620,000-plus subscribers.

All the talk about Verizon entering Canada has made some of the local carriers angry, with Bell even appealing to the Canadian government to keep Verizon out of the country. The main reason is that Verizon could buy twice as much spectrum than Bell or the other Canadian carriers due to a regulation that states that any new entrant to the country could buy two blocks of spectrum while existing carriers could only buy one.

Another complaint is that Verizon would not have to make any investment in infrastructure and instead would just be using Canadian infrastructure built by Canadians for the last 30 years. Verizon wouldn’t have to invest in supporting jobs or rural communities to create this infrastructure even if they can easily afford it.

Bell isn’t the only one who’s against Verizon entering the country, Rogers and TELUS have shown their discomfort with the matter and took it to government officials to change the policy that allows foreigners to buy Canadian spectrum, which would “have massive consequences for Canadians”. The three carriers together control 90% of the Canadian subscribers and they obviously wouldn’t like a powerful player like Verizon to start eating a piece of their pie.