Canada Nervous Over Verizon's Possible Entry into its Wireless Market

Canadians appear to be growing increasingly anxious at the thought of Verizon becoming a player in the wireless sector.

Earlier this year, Verizon appeared interested in acquiring two start-up carriers in Canada, both of which are struggling financially, news reports said. One of these is Wind Mobile, now owned by VimpelCom, a Russian company based in the Netherlands. The other is Mobilicity, which is losing about $30 million a month, news reports said.

In response, ads have been appearing in Canada over the last few weeks rejecting Verizon’s entry.

“How does losing thousands of jobs in the cell phone industry help Canada? It doesn’t,” one ad, quoted by The New York Times said.


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“We’re having a national battle about an American company buying a Russian company that was once an Egyptian company,” Iain Grant, an analyst with the Seaboard Group, told The Times. “Where else can that happen?”

Verizon’s Francis J. Shammo, the chief financial officer, suggests, too, the company may not expand into Canada.

“Let me emphasize this is really an exploratory exercise for us,” he said in a recent statement. “Obviously some of the cautions here are the regulatory environment, a foreign investor coming into the Canadian market and what does that mean?”

Bell Canada, Telus and Rogers Communications are the three top carriers now in Canada. Verizon would be regulated as a start-up if it acquired Wind or Mobilicity.

“We have absolutely no issues with competition or more competition or vigorous competition,” Mirko Bibic, chief legal and regulatory officer at Bell Canada, told The Times. “But it has to be a level playing field.”

“I think Verizon is going to come,” Dvai Ghose, a telecommunications analyst with Canaccord Genuity, told The Times. “But I also think it’s going to be tougher than Verizon expects.”

Reuters reports that Verizon wants to purchase Wind Mobile for between $600 million and $800 million. The Toronto Globe and Mail identified Verizon’s offer for Wind Mobile at $665.87 million. It is unclear how much Verizon could pay for Mobilicity, MobilityTechzone reported.

The wireless sector "is already intensely competitive in Canada with three large national carriers and a few dozen regional and smaller carriers," and "Telus has never shied away from competition, and that won't change if a U.S. carrier opens shop in Canada," according to a Telus media statement carried by MobilityTechzone. "Bell is always ready to compete," BCE added in a media statement.