UPDATE 1-Canadian telecom majors' shares surge as Verizon threat fades
(Adds spike in stock prices, government comment on spectrum auction, background and details on telecom policy)
By Euan Rocha and Alastair Sharp
TORONTO, Sept 3 (Reuters) - Shares in Canada's big three wireless providers - BCE Inc, Rogers Communications Inc and Telus Corp - surged on Tuesday after Verizon Communications disclosed that it no longer plans a foray into Canada.
Verizon had been sniffing around a possible move into Canada for months. But shortly after clinching a mega $130 billion deal to buy Vodafone Group out of its U.S. wireless business on Monday, the U.S. telecom giant made clear it will not enter the Canadian market for now.
Canadian telecom shares were hammered in June on early reports that Verizon, which has more U.S. mobile subscribers than Canada has citizens, was looking at expanding north.
"Those Labour Day fireworks are probably champagne corks flying from the headquarters of Rogers, Telus and BCE," said National Bank analyst Adam Shine.
Shares in Rogers surged 8 percent in midday trading on the Toronto Stock Exchange, while those in Telus and BCE rose 7.7 percent and 4.2 percent, respectively, as analysts raised their price targets and ratings on the trio following the Verizon announcement.
National Bank's Shine himself lifted his price target on shares in Rogers to C$47.50 from C$44, in Telus to C$36 from C$33 and in BCE to C$45.50 from C$44.
Verizon's decision marks a lost opportunity for investors in Canadian telecom startups Mobilicity and its larger rival Wind Mobile, partly owned by European telecom giant Vimpelcom . Continued...