Analysis: Ottawa set to leave telecom door open for Verizon

Thu Aug 8, 2013 1:10am EDT
 
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By Alastair Sharp and Euan Rocha

TORONTO (Reuters) - Canada's wireless industry is bracing for its biggest shakeup in decades as Ottawa appears impervious to pleas that it block U.S. giant Verizon Communications Inc from the lucrative market.

The three big domestic players, Rogers Communications Inc, BCE Inc's Bell and Telus Corp, which cater to 90 percent of the country's wireless subscribers, have launched a massive public relations campaign against rules designed to increase competition.

They include giving foreign carriers preferential access to airwaves being auctioned next year, and looser restrictions on foreign ownership of small wireless operators, which the local market leaders have been warned away from.

With full-page newspaper ads and the creation of a www.fairforcanada.ca website, the incumbents argue that the entrance of a company like Verizon would force them to cut jobs and trim coverage in rural areas.

"We don't think organizations like Verizon, that are deeply resourced ... need to be bootstrapped by the Canadian government," Telus Chief Executive Darren Entwistle told Reuters in an interview last month.

Telus and its peers have zeroed in on Verizon because the U.S. company offered to buy Canadian telecom startup Wind Mobile for $600 million to $800 million, and is in talks to acquire another startup called Mobilicity, sources familiar with the matter previously told Reuters.

But given years of concerted government efforts to boost competition in the sector, the Canadian carriers' chances of success appear slim.

"We want all regions of Canada to benefit from competitive market forces, which is why more progress must be made," Canadian Industry Minister James Moore said last week. "We will continue to stay the course by ensuring Canadians benefit from a competitive telecommunications industry."   Continued...

 
A sign hangs in the Verizon booth on the first day of the Consumer Electronics Show (CES) in Las Vegas January 8, 2013. REUTERS/Rick Wilking