UPDATE 2-Verizon eyes Canadian wireless start-ups

Wed Jun 26, 2013 5:53pm EDT
 
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* Initial offer for Wind in $600 mln-$800 mln range -source

* Startups have struggled to compete with dominant players

* Upcoming 700 MHz auction key to market as data booms

By Alastair Sharp and Euan Rocha

TORONTO, June 26 (Reuters) - Verizon Communications Inc has offered to buy Canadian telecom startup Wind Mobile and is in talks to acquire Mobilicity, as it seeks to challenge Canada's three big wireless providers, sources familiar with the deals said on Wednesday.

One of the sources said Verizon had last week presented a tentative offer of $600 million to $800 million for Wind Mobile, with final pricing subject to due diligence. Another source cited Verizon's talks with Mobility, a rival startup.

Both sources declined to be named because they are not authorized to speak to the media.

The U.S. telecom leader, which sold its minority stake in Telus Corp in 2004, is looking to re-enter the Canadian market to boost its growth prospects.

For a relatively small sum, the potential deals would allow Verizon to re-enter Canada's high margin wireless business, placing it in a good position ahead of a government auction of spectrum, or wireless frequencies, said Barclays analyst Amir Rozwadowski.   Continued...