Verizon Communications has reportedly moved closer to entering the Canadian wireless market, having offered to purchase beleaguered operator Wind Mobile and initiating talks with equally-troubled Mobility.
Reuters reported that sources claimed Verizon has offered up to $800 million to purchase Wind, seeming to confirm reports from earlier this month that Verizon was interested in entering the Canadian market. That entry is expected to take place ahead of Canada’s planned auction of 700 MHz spectrum licenses, which was recently delayed until early next year. The delay was needed as the Canadian government was looking at ways to infuse more competition into the country’s wireless market that continues to be dominated by three operators: Rogers Wireless, Bell Canada and Telus Mobility.
Wind’s future was recently put in doubt when Orascom Holdings announced it was backing away from consolidating its ownership in the carrier. Those moves had initially been put in place after a successful legal fight over foreign ownership rules.
Mobility is in a similar financial situation as the Canadian government recently denied a deal for Telus to acquire Mobility citing the need to maintain competition in the market.
Wind, Mobility and Public Mobile all entered the Canadian market following the acquisition of 1.7/2.1 GHz spectrum licenses during a government auction in mid-2008. All three operators looked to break into the market by offering rate plans that undercut those offered by the three established players, but have so far struggled to maintain profitability.
The Canadian government has instituted rules for the upcoming 700 MHz spectrum auction designed to again promote new entrants by preventing established operators from gaining access to many of the licenses. Verizon currently owns 55% of Verizon Wireless, but has said it would be interested in acquiring the 45% stake currently controlled for Vodafone Group, which analysts have priced at more than $100 billion.
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