Verizon No Longer Going to Canada; Canadian Carriers Rally
September 3, 2013 11:28 AM
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Verizon says it has nothing to do with the Vodafone buyout
Verizon has decided not to pursue a place in
the Canadian wireless market
afterall, and Canada's major carriers are rallying as a result.
, Rogers Communications Inc., BCE Inc. and Telus Corp. -- which are Canada's three major wireless carriers -- rallied after Verizon announced that it would no longer try to make its way into Canada.
BCE shares rose 4.3 percent to C$45.03 at 9:01 a.m. on alternative exchanges in Toronto today while Telus rose 6 percent to C$34.75 and Rogers rose 3.5 percent at C$43.06 (from August 30).
Stocks had dropped back in June when Verizon said it would bid to buy Wind Mobile -- the largest of three new Ontario-based carriers. But on August 29, shares of Canada's existing wireless companies rallied in response to talks of Verizon buying out Vodafone.
Verizon Communications announced that it was
buying Vodafone's 45 percent stake
in Verizon Wireless for $130 billion USD yesterday. This means that Verizon now has full control of the wireless network, which happens to be the largest in the U.S. It also has full access to the profitable network's cash load, which will be used to improve the network and fend off competitors.
With this news rolling out, many suspected that Verizon would no longer try to
make a move into Canada
. However, Verizon CEO Lowell McAdam will tell you that the decision not to go into Canada has nothing to do with the Vodafone buyout.
“Verizon is not going to Canada,” said McAdam. “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.”
This was good news for BCE, Rogers and Telus, since all three together already claim 90 percent of Canadian mobile customers and can continue keeping a tight hold of the market.
Canada has been searching for a fourth major carrier to compete with its top tier carriers for greater consumer choice and competitive prices. Other smaller companies have come along in an attempt to be the fourth, such as Public Mobile, Wind and Mobilicity. However, none of them have been as profitable as the top three.
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RE: There is already a fourth player
9/3/2013 3:01:02 PM
I'd absolutely LOVE Verizon to come here and set up shop. As it stands right now, Robellus is a basket full of legal statutory tentacle rape. There is zero competition, yet when a new entrant muses about setting up shop, they gang up to say how everyone will suffer.
Pro-tip: they don't speak for the rest of us.
The ONLY reason I'm even staying with Rogers Wireless for my cellphone service has nothing to do with its network or selection, never mind pricing. It's a little department called Retentions. Call in and say you want to cancel one of their services, and depending on who's answering your call, they'll most likely bend over to try and keep you from going elsewhere. Those retention plans, besides corporate plans, are far better than what is usually available.
RE: There is already a fourth player
9/3/2013 6:29:48 PM
I did the same thing with Bell Aliant for my phone/TV/internet over fiber plan. Told them Rogers called me offering a great intro price and they matched it, locking in the discount for 3 years. Saved me $80 per month.
"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken
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