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http://www.theglobeandmail.com/repo...-aims-to-salvage-competition/article12595163/
Verizon has held exploratory talks with investors in Wind Mobile – one of two struggling new entrants in the wireless market – in recent weeks, but those discussions are still at an early stage.
The game plan would be for Verizon to take over a smaller player such as Wind Mobile and participate in the coming auction of new wireless spectrum to create a strong fourth carrier, said two industry sources familiar with the situation. The most attractive target is Wind, the larger and healthier of the two small operators, but Mobilicity is also an option...

A huge company such as Verizon could then roll out new, faster technology and low prices to undercut Canadian incumbents.
 

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Verizon would not undercut Canadian incumbents. If you look at their current prices, they are significantly more expensive than what the Big 3 offers. Rogers, Bell and Telus might even welcome Verizon with open arms so they can continue driving up prices in the Canadian market.
 

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If Verizon purchased one of the AWS carriers, it would still need to compete on price because they can't compete on coverage without a significant investment.

That said, Verizon would have the money to make such a investment in infrastructure to bring Wind up to the level of Rogers/Telus/Bell. Then they could match prices of the "big 3", and then provide a added feature of allowing their customers to "roam" in the USA for free.
 

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If Verizon attempts to compete on price, they'll never get the ROI they're looking for.

If Verizon matches Big 3 pricing then it wouldn't provide the shakeup that the Canadian market needs. Also Verizon cannot offer free US roaming as Verizon in the US and what would become of Verizon in Canada use different and incompatible network technologies.
 

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Will it be Shaw Verizon

Last week's change in Shaw strategy from "Share Buyback" to maximize shareholder value ahead of sale to "Invest in business" means that the Rogers buyout of Shaw is off the table at least in the short term.

Perhaps it was conditions required for CRTC approval of the Bell/Astral deal that changed Rogers tune. No doubt many of Shaw Media's most profitable channels would have had to be divested to Corus etal.

Now the government has let Shaw know that they cannot transfer their wireless spectrum to Rogers outside of the original terms of the last Spectrum Auction. This leaves Shaw $200m cash short for planned upgrades to their existing physical plant. Additionally, Verizon has been told they will require a Canadian partner in order to get approval to takeover Wind and Mobilicity.

The door is now open for some sort of Shaw Verizon joint venture. Is the sudden investment in a Shaw Direct marketing program (the first in over 6 years) an indication?
 

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Can i ask where you saw that the government told Verizon they would need a Canadian partner to purchase Wind &/or Mobilicity ? I did not see that mentioned in most articles .
 

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Verizon - Canadian Telecom Oligopolarchs are worried.

Two full page ADS seen in the Globe and Mail newspaper of Saturday July 27, 2013.

Looks like full page ADS are from BELL, telling us why they are against / think it is bad to encourage, give incentives to VERIZON to enter the Canadian cellular market as a competitor.

BELL must be quite concerned - if they feel the need to take out two full page ADS, on adjacent pages, in the Globe and Mail.

That costs.

Get with it BELL ( & others, Rogers, Telus ).

Time to start paying attention ... because ...

The big competition may be coming.

Bring them on I say.

Chase out those Canadian Oligopolarchs.

Shake and Bake and Wake up those Canadian Telecoms.

Verizon, and Wind, and Orascom and other similar interested parties,
should join and form a Consortium, get the required spectrum in Canada, and work together and break into the Canadian market as a competitor, and shake up the current 3-play / Oligopoly here in Canada.

Wake-ie Wake-ie ... here comes the coffee.
 

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Discussion Starter #8 (Edited)
Here's Bell's press release from July 25. I haven't seen the full-page ads, but I expect the content is similar.

Bell Canada urges Ottawa to close loopholes that favour big US wireless carriers

My brief comments on what Bell calls "loopholes", which in fact are intentional government policy decisions designed to bring more competition and lower consumer prices for wireless services.

Buy twice as much new wireless spectrum in the upcoming auction of Canada's 700 MHz airwaves as Canadian carriers at a lower overall price.
... There are 4 prime blocks of this spectrum available. Canadian carriers like Bell can only buy 1 each - but big US carriers like Verizon can actually buy 2. The way the auction is structured, American companies would pay less and get more spectrum, reducing the government's auction revenues at the expense of Canadians. As well, one of Canada's own major wireless carriers could be shut out of the auction for our country's airwaves entirely.
There may be 3 major wireless carriers, but there are only 2 networks - Rogers and the Bell/Telus shared network. So each major network is guaranteed 1 prime block. Personally, I wouldn't be surprised if Ottawa tweaked the rules for the new spectrum to limit Verizon to one block. Bell doesn't mention the large amounts of spectrum the majors have acquired over the years on very favourable terms.

Get a free ride on the world-leading networks funded and built by Canadians.
Government rules give a company like Verizon the option to offer wireless service simply by riding on the networks of Canadian carriers, world-class wireless infrastructure funded by Canadian investors and built by Canadian workers over the last 30 years. Verizon would not need to build its own network throughout Canada, invest in rural communities or support job growth as Canadian companies do. Verizon can easily afford to build its own networks and should do so if it wants access to Canada's airwaves.
There is nothing "free" about this arrangement - Verizon would have to negotiate market-based roaming rates for rural Canada.

Acquire smaller Canadian wireless companies at fire-sale prices.
If wireless start-ups are financially distressed and looking for buyers, government rules prohibit them from being sold to Canadian carriers large enough to buy them like Bell, Rogers or TELUS. That depresses the value of the startups - and lets a US company like Verizon acquire them at cut-rate prices and gain all their assets, including their existing wireless spectrum already subsidized by Canadians.
The big 3 have shown in the past that they wait for new competitors to fail and buy them out to remove the competition and continue their oligopoly. It obviously takes deep pockets and a serious long-term commitment to build out a national network and customer base in Canada. Even the backing of a large multi-national like Orascom (now VimpelCom) wasn't enough to make Wind succeed. Bell talks about the size of the Verizon Wireless parent company. VimpelCom had revenues of USD 23.1 billion in2012, so size doesn't guarantee success.

Verizon Wireless is part of the $120-billion Verizon Communications conglomerate - in comparison, Bell Canada, the country's largest communications company, has annual revenue of approximately $18 billion.
 

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Bell is trying to play on nationalist sympathies to build support for maintaining the status quo in terms of the wireless market. Unfortunately for them, I think all three of Bell Rogers, and Telus sunk that idea with many years of poor service. I doubt many Canadians care at all about protecting these companies from anyone.
 

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Very good points Dr. Dave and I agree with TorontoColin.

The big 3 have benefitted a great the deal with the spectrum they aquired in the early years. They have colluded to keep the same pricing across all 3 companies and have gobbled up smaller companies.

I like the fact that a new entrant can bid on 2 blocks of the 700mhz spectrum. That would insure that Verizon would at least get one in Quebec. In the last time auction Videotron overpaid to block out Wind and Moblicity from coming here. I don't think they would be able to do that with Verizon.

Even if Verizon comes in and just barely matches the big 3 and Videotron pricing, the canadian companies will have to lower prices and compete.

I think Verizon can be good for competion.
 

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One concern for me would be Canadian Jobs. Verizon could likely handle all billing, CSRs, management, etc out of the US with minimal need for Canadian jobs. I know this from working for a US conglomerate for many years.

Yes, I realize that Bell outsources* some CSRs, but Rogers does not. I don't know about Telus.

Also, I've seen several ads recently that indicate US cell phone pricing actually higher than Canadian pricing for "most" customers. I'm sure specific instances would show the opposite if you cherry-pick services for comparison, but it seem unlikely there will be a huge price drop, especially if the C$ were to weaken.

*Edit - Should be offshoring
 

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I'm thinking that if one of the small wireless carriers were to be purchaesd, and have branding like Verizon, it could be very compelling.

First, a lot of Canadians go to the US for business, etc. Verizon could potentially offer customers "free roaming" in the US on the parent companies network. This could partly make up for the sub-optimal roaming rates within Canada when you leave a Wind "home zone".

Second, because of the close proximity to the US, a lot of Canadians are exposed to Verizon advertising, and the fact that they have the best network in the US. This is a positive when marketing to Canadians when they brand is already known here.
 

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One concern for me would be Canadian Jobs. Verizon could likely handle all billing, CSRs, management, etc out of the US with minimal need for Canadian jobs.
Those Canadian companies wouldn't cease to exist though. They may end up cutting some jobs if they lose some money, but by the same token, if we allow Bell to buy Wind, do you think they will maintain the Wind retail presence, and keep all their billing, advertising, management, tech support, and other Canadian jobs? They'll just roll them into Bell and lay off any excess.

Also, I've seen several ads recently that indicate US cell phone pricing actually higher than Canadian pricing for "most" customers. I'm sure specific instances would show the opposite if you cherry-pick services for comparison, but it seem unlikely there will be a huge price drop, especially if the C$ were to weaken.
There would absolutely not be any price drops. However, Verizon would not be able to raise prices significantly without making substantial network improvements. You can't try to match prices with the Big 3 without a matching network.

Verizon isn't interested in coming to Canada to lose money. They're not a charity, and they're not particularly consumer friendly in the US, which is something we shouldn't lose sight of. However, if someone strong, like Verizon, doesn't buy Wind/Mobilicity, then they will fold or be bought by the Big 3, and then we return to the status quo. And I guarantee you that won't end in lower prices for all. A real fourth player at the very least should make the market more competitive.

Verizon could potentially offer customers "free roaming" in the US on the parent companies network. This could partly make up for the sub-optimal roaming rates within Canada when you leave a Wind "home zone".
That's not possible with the current networks. Verizon phones cannot work on Wind/Mobilicity, and Wind/Mobilicity phones cannot work on Verizon. It may be possible one day with their LTE networks, but that's probably five years down the line, and likely close to a decade before we hit a critical mass of cross-compatible handsets.
 

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One concern for me would be Canadian Jobs. Verizon could likely handle all billing, CSRs, management, etc out of the US with minimal need for Canadian jobs. I know this from working for a US conglomerate for many years.

Yes, I realize that Bell outsources some CSRs, but Rogers does not. I don't know about Telus.
Rogers outsources some customer care and tech support calls, but the companies they outsource too have their operations based in Canada.

Telus owns their own outsourcing company and outsources a lof ot their first tier customer care calls on the wireless side to countries like the Philippines and Guatemala
 

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According to the Financial Post, Verizon's board will meet next week to discuss the Wind acquisition, and VimpelCom's board will meet to consider offers. Reportedly there is a standing offer around 700 million for Wind from Verizon.

Additionally, it looks like Rogers is attempting to work around the government's efforts to block the incumbents from acquiring the new entrants by funding a third party (Birch Hill Equity) in their efforts to purchase Wind. Additionally, the Big Three have launched a PR campaign centred around Canadian jobs.

Due to an intentional loophole in the rules for the upcoming 700 spectrum auction, Verizon is actually in a position to land more 700 spectrum than any of the Big Three, as well as Wind's 1700 spectrum. This would put them in position to potentially offer the strongest LTE network in Canada.
 

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The Financial Post doesn't say it, but it seems highly likely that, should they be successful in acquiring Wind, Verizon would also target Mobilicity. While, as I mentioned, Verizon is not exactly the most consumer friendly option, they (along with equally consumer unfriendly AT&T) are likely the only carrier with deep enough pockets to make it work and reason to value the market enough to try.
 

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Here's Bell's press release from July 25. I haven't seen the full-page ads, but I expect the content is similar.
Today I heard a radio ad, supposedly from someone who works at Bell. It seemed strange to hear Bell make claims of unfair competition and how Verizon would be using the Bell network for free. How would it be any different than what happens now, when Wind customers roam on other networks? Last I heard, the users pays for roaming on Bell, Rogers etc. How is that free? What about how Bell/Rogers/Telus won't let Ting use their networks? Who's trying to block competition now? What about those carriers who buy up blocks of spectrum, just to keep other from buying it?
 

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It's not free. They have to pay a fair market wholesale rate for usage on the other networks, and they won't even use Bell (Rogers is the only one with sufficient cross-compatibility). It's true that they don't have to pay for network maintenance or build-out, but Bell/Rogers/Telus are free to use the money they get from the wholesale rates to pay for that.

The only way it's "free" is in the sense that Verizon is "free" to make use of those networks at the set rate, if they choose.
 

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Food for thought: I've heard it said (actually read it) that Verizon's interest in acquiring Canadian cell phone companies (and the related spectrum) is to provide their (US) business customers with seamless North American wireless service. Their only interest is in the larger Canadian markets (Montreal, Toronto, Vancouver) and they have no interest in smaller/rural markets. Hence the impact on the average Canadian user may be marginal at best (from a competitive perspective). The cost to the Canadian taxpayer, on the other hand, may be significantly high if spectrum is auctioned at less than optimum prices by limiting the ability for all interested parties to bid freely.
 
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