US operator Verizon Communications has made a $700 million bid for Canada’s Wind Mobile and begun acquisition talks with Mobility, another Canadian operator, according to a report from the country’s Globe and Mail newspaper.
Citing sources familiar with the situation, the Globe and Mail says Verizon (New York City, NY, USA) is also considering whether to participate in a forthcoming auction of spectrum in Canada.
The country’s telecoms market is dominated by the ‘big three’ of Bell (Montreal, Canada), Rogers (Toronto, Canada) and Telus (Burnaby, Canada), but Verizon clearly has the financial strength to break the incumbents’ grip – something smaller operators like Wind Mobile (Toronto, Canada) and Mobilicity (Vaughan, Canada) have failed to do.
Verizon has previously been stopped from entering Canada by strict rules on foreign ownership of telecoms assets, but authorities last year relaxed some of their restrictions.
According to the Globe and Mail, the operator might look to build market share swiftly by undercutting the incumbents on pricing and taking advantage of its US interests to provide cheaper roaming deals to customers.
Wind Mobile owner VimpelCom (Amsterdam, Netherlands) kicked off the process of selling the business earlier this year by hiring investment bank UBS to manage the sale, and previous estimates have put the value of the operator at between $500 million and $1 billion.
Meanwhile, Mobilicity was the target of a $380 million offer from Telus earlier this year before regulatory authorities said a takeover would violate rules preventing the big three from acquiring spectrum held by smaller rivals.