According to a report by the Globe and Mail, Verizon has delayed its acquisitions of WIND Mobile and Mobilicity, which appears to put its entry into Canada in jeopardy despite Ottawa pursuing the company as a possible national fourth wireless carrier.
After tabling a $700-million preliminary offer for Wind and signing a non-disclosure agreement with Mobilicity in recent months, Verizon has now decided to delay pursuing those deals until after a government auction of wireless licences in January, said two people familiar with the situation.
The company will now shift gears to decide whether it will participate in the upcoming 700 MHz spectrum auction. If Verizon is able to enter bidding and win spectrum it desires, then sources say it will consider bidding for WIND and Mobilicity possibly in the next year.
This delay will allow Verizon more time to contemplate entering the Canadian wireless market as the auction isn’t set to begin until January 14, 2014. The deadline for carriers to apply and place a deposit for the auction is September 17. Once prospective spectrum bidders apply and paperwork submitted, they are banned from negotiating deals with other players until 2014.
The Globe report says there is no clear reason why Verizon has changed its strategy, with speculation this could be an attempt to drive down prices of WIND/Mobilicity, seek more concessions from Ottawa or saving cash for the spectrum auction.
Earlier today it was revealed Verizon official met with Federal Government officials in May, prior to the US carrier making its potential bid for WIND Mobile.
By delaying its acquisition of these two wireless entrants, Verizon’s new timeline means it will have to wait until the 700 MHz auction has finalized and paid for by players before it can pursue the startups again, to prevent breaking anti-collusion auction rules.
By next spring, both WIND and Mobilicity would no longer be banned from selling its spectrum to incumbents, so the possibility of TELUS again trying to acquire Mobilicity would be possible.
Despite Industry Minister James Moore calling the ongoing Big Three PR campaign as “dishonest” lobbying, incumbents have refused to cease spreading their message. Rogers told Reuters the advertising will not stop and will continue:
“We think this is an important issue for Canadians. We’ll continue to work to make sure they understand the consequences of current government rules, which give an unfair advantage to large foreign players,” Rogers spokeswoman Terrie Tweddle said.
If you were eagerly awaiting the arrival of Verizon in Canada, looks like you’ll be waiting a lot longer now, that is if they still are coming.
