Canada telecoms shares slip on report about foreign entry
TORONTO (Reuters) - Shares of Canada's top three wireless telecom companies slipped on Thursday after a business television channel reported that three foreign operators have considered bidding in an upcoming spectrum auction, citing an unidentified source.
BCE Inc (BCE.TO: Quote) fell 1.7 percent to C$43.49, Rogers Communications Inc (RCIb.TO: Quote) slipped 1.2 percent to C$42.95 and Telus Corp (T.TO: Quote) was off 1 percent at C$33.15, while the broader market was also lower. .TO
The trio control a combined 90 percent of Canada's wireless industry and would come under enormous pressure if a large global player were to enter the lucrative industry.
The Business News Network report said AT&T Inc (T.N: Quote), Norway's Telenor ASA (TEL.OL: Quote) and Britain's Vodafone Group Plc (VOD.L: Quote) had looked at bidding in the auction - for which initial bids are due next week - but did not say whether any of the companies had decided to participate.
The companies did not immediately respond to requests for comment.
"In reality, we wonder if there really is much foreign interest," Canaccord Genuity analyst Dvai Ghose wrote in a note to clients in response to the report.
He said the strong position of established operators that offer television, fixed-line phone and Internet services as well as wireless, the high cost of entry to a mature market and regulatory uncertainty were headwinds for a possible entrant.
The homegrown stocks slumped 4 to 10 percent on June 26 on reports that U.S. giant Verizon Communications (VZ.N: Quote) was considering an entrance.
"Although today's reaction is muted compared to the June 26 selloff, it suggests that investors remain a little wary about the prospect of foreign players with deep pockets entering Canada and taking a slice of the wireless pie from the Big Three," said Elvis Picardo, a strategist at Global Securities in Vancouver.
(Reporting by Alastair Sharp; Editing by Richard Chang)
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