backtop


Print 21 comment(s) - last by Mint.. on Sep 5 at 3:43 AM

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. 

According to Bloomberg, 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.

Source: Bloomberg



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

By Guspaz on 9/4/2013 10:28:38 AM , Rating: 2
Videotron is extremely unlikely to expand beyond Quebec, particularly because of their partnership with Rogers to share LTE networks.

Videotron's competition in Quebec often means that the big three incumbents offer Quebec-only deals that are better than what they offer normally. For example, Fido (Roger's) $65 smartphone plan costs $50 in Quebec because Videotron has a similar offer. That said, both Fido's and Videotron's offer are a limited time sale, and Videotron is generally content to compete by bundle discounts rather than lower normal prices.

If Verizon entered the market, they would not have been able to offer bundle packs with television or Internet, and would have had to compete on price or features.


"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein

Related Articles













botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki