Shares of Canada telecom majors climb after Wind leaves wireless auction
TORONTO Jan 14 (Reuters) - Shares of Canada's top telecom providers, BCE Inc, Rogers Communications and Telus Corp, all climbed on Tuesday after Globalive's Wind Mobile withdrew from a major Canadian auction of wireless spectrum.
Globalive's decision to bail out of the auction dealt a blow to the Canadian government's efforts to spur competition in the sector and boosted the prospects of the three big players that dominate the country's telecom sector.
The move sent shares of Rogers and Telus up 1.6 percent in early trading on the Toronto Stock Exchange, while those of BCE rose slightly less than a percent.
Wind, a relatively new entrant to the Canadian market, said on Monday it quit the auction after its main backer, European telecom giant Vimpelcom Ltd, decided not to fund its participation.
"We believe Wind's withdrawal from the auction is yet another confirmation that Vimpelcom is not looking to invest in Canada for the long term," said Barclays analyst Phillip Huang in a note to clients.
Wind's decision all but assures that the country's telecom majors will walk away with the lion's share of the prized 700 megahertz spectrum, at a much lower price than they might have otherwise expected to pay.
The 700 MHz spectrum is particularly valued for its ability to carry a signal over long distances and to penetrate thick walls, making it useful for both urban and rural deployment. (Reporting by Euan Rocha and Alastair Sharp; Editing by Meredith Mazzilli)
© Thomson Reuters 2016 All rights reserved.