While rival carriers aren't happy, the Canadian government welcomes Verizon with open arms
Just last week, Canadian Industry Minister James Moore said that all regions of Canada need to benefit from competitive market forces. "We will continue to stay the course by ensuring Canadians benefit from a competitive telecommunications industry;" the Minister said. And Verizon is looking to purchase more than just WIND Mobile. There is speculation that the largest mobile carrier in the U.S. is also in talks to buy Mobilicity. Verizon's entry into the Canadian market would also help the Canadian government as it would presumably lead to Big Red's participation in an auction of spectrum by the Canadian government scheduled for next year. Verizon would be expected to bid on two blocks of spectrum. What happens when a deep-pocketed bidder enters an auction? Prices go up sharply and in this case, it would be the Canadian government, as the seller of the spectrum, getting the benefit of Verizon's entry into the Canadian market.
Verizon has 100 million subscribers in the states, ten times as many as the largest Canadian carrier, Rogers. This gives Verizon an edge when it comes to buying handsets, attracting talent and competing in Canada. Still, Morningstar analyst Imari Love wonders if it really would be worth it for Verizon to spend the time, money and effort to build up a business in Canada. Love says, "I don't ever see them truly piercing the oligopoly of the big three or matching their scale in terms of subscribers, nationwide coverage, and integrated network infrastructure."