Verizon said to have put possible acquisition of WIND and Mobilicity on holdAlex Wagner - Deputy Managing Editor, News Desk
Verizon confirmed back in June that it was interested in possibly entering the Canadian wireless market, with rumors suggesting that the carrier was considering an acquisition of WIND Mobile or Mobilicity. It sounds like the big red carrier may have recently had a change of plans, though, as a new report claims that Verizon has put any potential acquisition of the two small carriers on hold.
According to The Globe and Mail's "people familiar with the matter," Verizon has decided to postpone work on any carrier deals until the Canadian 700MHz spectrum auction takes place on Jan. 14. Verizon will instead try to decide whether or not it wants to enter the auction itself. If does so and successfully snags some airwaves, the sources of this report say that Verizon could consider making offers for WIND and Mobilicity sometime in 2014.
One of the rules of the upcoming spectrum auction is that any participants must apply and put down a deposit by Sept. 17. Once they do, though, they're prohibited from making any deals with other bidders until 2014.
There's no word yet on what's behind Verizon's decision to put off its potential acquisition, but some possibilities include a lessened interest in the Canadian wireless marker or an attempt to get WIND or Mobilicity at a reduced price. Verizon is said to have previously made a preliminary offer of $700 million for WIND while also signing a non-disclosure agreement with Mobilicity as preparation for deal negotiations.
Verizon hasn't explained why it's interested in breaking into the Canadian wireless arena, only saying that it's one of many business opportunities that it's exploring. The move could be a way for Verizon to continue to grow its business and find new ways to bring in cash. A rumor claimed earlier this year that AT&T was considering an acquisition of a European carrier for the same reason. Other factors that could help push Verizon into Canada include the 700MHz spectrum auction and the Canadian government's desire for a fourth major competitor to take on Bell, Rogers and Telus.
Even though any potential acquisition of WIND or Mobilicity by Verizon may be on pause, that doesn't necessarily mean that the big red carrier is no longer interested in Canada. This situation will be worth keeping an eye on going forward, especially considering that a federal ban preventing WIND and Mobilicity from selling their spectrum to the larger Canadian operators will end in the spring of 2014. That means that we could see some intense competition if that also happens to be the time that Verizon's interest in WIND and Mobilicity reignites.