Sprint, T-Mobile join Verizon in snub of Canada airwaves
By Alastair Sharp and Sinead Carew
TORONTO/NEW YORK (Reuters) - Sprint Corp and T-Mobile US Inc confirmed on Thursday they will not participate in Canada's upcoming auction of prized wireless spectrum, joining larger rival Verizon Communications Inc in shunning the market.
The decision by the big U.S. wireless operators helped lift shares of BCE Inc, Rogers Communications Inc, and Telus Corp, which together control about 90 percent of the Canadian mobile market.
The three stocks had already rallied earlier this month when Verizon disclosed it would not enter Canada for now, ending months of speculation that it would buy two small Canadian operators and bid for airwaves in the January 2014 auction.
The entry of a foreign giant like Verizon would have sliced into the profits of the Canadian players and forced higher bids at the spectrum auction, analysts said.
AT&T Inc declined to comment on whether it had submitted an application by the Canadian government's Tuesday deadline for companies to register for the auction.
But Scotia Capital telecom analyst Jeff Fan said in a note to clients that all four major U.S. wireless operators had confirmed they wouldn't be bidding.
The companies decided not to enter due to a likely unattractive return on investment, regulatory risks on both sides of the border, and a focus on the much larger U.S. market, Fan wrote in the note published late on Wednesday.
Shares in Telus jumped more than 2 percent by midafternoon on the Toronto Stock Exchange, while Rogers gained 1.2 percent and Bell was up 0.3 percent in a declining market. Continued...