Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
Verizon Communications this week did what it has wanted to do for some time. (No, not make everyone with an unlimited data plan migrate to a capped data plan. ZING!). It finally put the wheels in motion to gain full control of that revenue-generating monster Verizon Wireless. Sure, setting that plan in motion will cost the company $130 billion, but if I had access to $130 billion, buying a 45% stake in Verizon Wireless would be pretty high on my list of things to buy.
As such, Verizon will now reap all the fiscal benefits Verizon Wireless has been known for over the past several year, which included throwing off billions of dollars in dividends to its parent companies. What a nice kid.
As part of this big announcement, Verizon also sent a hockey puck flying to the head of our northerly neighbors by claiming it was no longer interested in anything Canada-related, except for maybe an occasional run across the border to pick up some maple syrup.
This followed months of apparent “teasing” in which Verizon was hinting it would enter the Canadian wireless space by acquiring some distressed mobile operators and open up a can of competition on that country’s established carriers.
(For those that must know, my affinity for Canada goes back to my youth where “Strange Brew” basically shaped my early view on life. Also, in my early journalist days I was fortunate to cover the Colorado Avalanche National Hockey League team that had conveniently decided to move from its previous home in Quebec City, Quebec, to my neck of the woods. For those in the know, the Avalanche immediately went on to win the Stanley Cup – something the previously known Quebec Nordiques were unable to do – and did so thanks to Canada’s best goalie Patrick Roy who was conveniently traded to the Colorado Avalanche early in that first season in Colorado. Long story short (too late!), Canada is awesome.)
Here is Verizon CFO Fran Shammo speaking in July to analysts regarding the carrier’s interest in Canada:
“If you look at the population of Canada, about 70% of that population is between Toronto and Quebec. That’s adjacent to the Verizon Wireless properties. Again, if you look at the spectrum auction, it mirrors up exactly what we launched here in the United States on the 700 MHz contiguous footprint. So we’re looking at all these, but obviously some of the cautions here are the regulatory environment, a foreign investor coming into the Canadian market and what does that mean? So again, cautiously looking at it. Not ready to make any announcements today. And we continue to explore and have discussions, but at this point it’s just really an exploratory exercise.”
Sure, Shammo framed the comments with the term “cautiously looking at it,” but if I was a country eagerly looking for some new blood, I would have been dancing in the streets, or at least ice skating on the frozen rivers.
Now, just over a month later, here is how Verizon CEO Lowell McAdam dismissed all of that crazy Canada talk:
“Look I just have to say that the press made a lot more of our interest in Canada then there was on the fourth floor of Basking Ridge. It is something that we look at, we look at a lot of different countries around the world, will continue to do that. But it was always on the fringe for us. And as Fran and I have looked at opportunities to push the One Verizon that I talked about before, those are much better returns for our shareholders than going into Canada. So we never really seriously looked at this. I mean we looked at, but we never seriously considered the move and that’s off the table at this point.
Dang! Them is some cold-blooded execs over there at Verizon. Playing with the emotions of Canada that way, then kickin’ em to the curb just as quick.
Not to get all judgmental (too late) on how Verizon handles its business, but what’s up with teasing Canada like that? I mean, it’s Canada. What the heck did Canada ever do to deserve such treatment?
This of course now leaves Canada in a bit of a pickle (probably covered in maple syrup) as the government seemed to be banking on Verizon, or really anyone, to enter the market and show that the Canadian government is trying to infuse some competition in the market that may or may not be in desperate need of such an infusion. That stance has led to some tense posturing between the government and Canadian carriers, including this awesome website from Industry Canada countering claims by the country’s larger operators.
As with all things Canada, I am sure this mess can be handled with the utmost dignity and professionalism, or at least with the calm and demeanor Canadian’s are known for.
But, if it does get out of hand, let’s hope Verizon does at least feel some shame for its actions, even if it is for only two minutes.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–Speaking of Canada getting no respect (again), Microsoft this week sunk (get it?) $7.2 billion into acquiring Nokia’s handset division. You remember Nokia, right? They make awesome phones like this:
(Navi-Roller!)
And this:
(This company used to dominate … DOMINATE! … the handset market.)
So, obviously Microsoft had to buy them.
In doing so, Microsoft has left Canadian device maker and former vy-er for handset domination BlackBerry dangling in the breeze. You remember BlackBerry? They used to make devices like this:
And this:
(Where did it go so wrong?)
Was it really so long ago that BlackBerry was throwing money at patent lawsuits like it grew on maple trees, only to now be on the verge of a total breakup of the company in order to garner some semblance of value for shareholders?
Similar to my plea last week for Verizon to at least keep a little cash on the side to snatch up a beleaguered Canadian wireless carrier or two (and that worked out pretty well), I am not hoping that Microsoft sees the light and at some point throws a few Looney’s at BlackBerry to further stock its portfolio of “past-their-prime/missed-the-boat” wireless assets.
The way I look at it, the only thing better than a pair of floundering companies under one roof is three, right?
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
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