Verizon has always had its share of the spotlight, but never so much as this past week when rumors of Verizon moving into the Canadian market and its offer to European's Vodafone for a $130 billion buyback of the 45-percent of its Verizon Wireless stock owned by the Vodafone. It appears that there is only truth in the latter rumor and deal, with Verizon's CEO Lowell McAdam dispelling any interest in the Canadian rumor. Many thought because of the tremendous expense of the Vodafone deal, Verizon chose to drop the Canadian venture, but McAdams stated in a phone interview with Bloomberg:
Verizon is not going to Canada. It has nothing to do with the Vodafone deal; it has to do with our view of what kind of value we could get for shareholders. If we thought it had great value creation we would do it.Advertisement
The existing "Big Three" Canadian companies appeared relieved that Big Red decided to stay within its own bounders, as there was a lot of uncertainty among the shareholders and stock prices. This announcement should help stabilize their rate environment and help the stock prices return close to previous highs.
BCE, Rogers, and Telus already own 90-percent of the Canadian mobile market and the government is trying to foster more competition and even went so far to reserving blocks of 700-megahertz spectrum and preventing buyouts of smaller companies to keep the big three companies from completely taking over the market. The existing companies claim that when bidding on open spectrum, the "rules" favor the foreign companies.
Mark Langton, a spokesman for BCE said in an email, the Verizon news is significant. But the regulatory loopholes that give advantages to big foreign carriers remain and should be closed.Advertisement
So while there was some interest in "dripping our toe in the water," as Verizon's CFO, Fran Shammo stated, that "dipping interest" was simply looking into a possible deal if it would make good business sense, and apparently Shammo's toe and foot are now planted firmly on U.S. grounds.