Verizon to enter Canadian market? Will Canadians benefit from such a move?

[MR_BIGGS]

http://fullcomment.nationalpost.com/...-big-wireless/

Less than a month ago, fans of Canada’s three wireless giants were explaining what a dirty trick it was that the CRTC had introduced a code of conduct that would impact their business.

Under the code, customers would be able to cancel three-year contracts after just two years without ludicrous cancellation fees, limits would be put on the ability of wireless providers to surprise customers with big charges for out-of-country usage, and bills would have to be easy to understand.

The wireless firms were outraged. They saw no reason for bureaucrats to be interfering in the operations of free enterprise, and because, they insisted, the Canadian market was already highly competitive, even though 90% of it was under their control.

On Wednesday, some of the air was taken out of that argument, when rumours hit the wire that Verizon, a U.S. wireless operator, is seriously considering entering the Canadian market. Verizon is reported to have offered $700 million to buy Wind Mobile, and might also be eyeing Mobilicity, both of which are small operators sharing the 10% of the market not controlled by Telus, Rogers and BCE.

The rumours sideswiped shares in the three Canadian firms. Analysts called the situation a “game-changer” and predicted the ‘Big Three’ could lose 1.5 million subscribers. Why? Because Verizon would represent real competition, not the ersatz kind Canadians have been getting.

Verizon is huge. It has almost 100 million customers, three times the population of Canada. Its revenue last year was almost three times that of the three big Canadian firms combined. In terms of its ability to offer cheap deals to Canadians, the playing field would be anything but even. Verizon, in other words, could do to the Big Three what the Big Three has been doing to their tiny Canadian competitors: swamp them with its advantages in size and financial clout.

That being the case, there should be no tears for the Canadians. They’d be faced with an unfair fight against a much bigger competitor with far greater resources. They’d have to scramble hard just to hold onto the customers they have. They’d have to offer better prices, better service, and a lot less of the arrogance that has typified the market until now.

It’s about time.

It’s true that Ottawa has manufactured this situation via its byzantine efforts to control and carve up the market via the Canadian Radio-television and Telecommunications Commission, which spends its time inventing new hoops for the industry to jump through.

The federal government has been trying to force-feed artificially-controlled “competition” to the market for years, rather than just opening the gates to foreign investors and letting the chips fall where they may. In doing so, it has all but begged foreign firms to make a bid like Verizon’s. The U.S. firm can now buy one or more of the struggling upstarts (all of which are eager to be bought), take advantage of the cheap spectrum the small firms were allowed to buy in a 2008 auction choreographed by Ottawa, and add even more spectrum in an upcoming sale in which “new entrants” like Verizon get special treatment.

Industry Minister Christian Paradis, meanwhile, has made it clear the three big Canadian firms won; be allowed to meddle in the process by making competing bids for Verizon’s target firms.

It’s hardly fair, but the Canadian wireless business has never been fair, and until now the beneficiaries have mainly been the suppliers. They might have insulated themselves against a Verizon-like threat by offering better prices and much-improved customer service. The Big Three insist Canadians love their carriers, especially the three-year contracts for which so many people sign up. But if that’s the case, why would they be so eager to get out of them, and why would they so regularly flood the CRTC with complaints?

What goes around comes around. The Big Three have used their dominance to suit themselves at the cost of a disgruntled customer base. Now they face the challenge of a competitor able to lure away customers with offers that will be hard to refuse. The Big Three made big profits off their dominant position. I hope they saved some of it; they may need the money soon.

[godwin]

Verizon is just the american version of Vodafone... with a bit of Bell thrown in for historical purposes.

I think it can be better than Wind / Mobilicity IF they throw in the money to build out networks... that's something that got Mobilicity and an extent Wind in trouble.. having only AWS band didn't help either.

We might see a price war, and complaint about service for Verizon in the short term.. more towers better service on the mid to long term.

[Gridlock]

Oh the double edged sword.

Canada is a speed bump to US companies. Therefore, we protect the Canadian companies. Because the Canadian companies are protected, they act like assholes.

It is nice to see that the Can telecoms are right back to the old ways of doing business. Nice tight contracts, and everyone scratches everyone else`s backs.

Reminds me of the good ole days when grandma`s paying $5 a month for 50 years to rent her phone. Long-distance at $1 a minute. Good stuff.

[bcrdukes]

No. The only people who benefit are Verizon's shareholders.

[fobulaus]

Why wouldn't competition lead to better plans and ultimately benefiting consumers?

[vitaminG]

Verizon gets to buy companies that were able to bid on spectrum at below market prices. Verizon which is a huge company gets to enter the Canadian market with subsidized spectrum.

I doubt if the plans will be any cheaper since if you look at verizon's plans in the US they arent really any cheaper than the plans here.

End result is shareholders of the big 3 get the shaft

[4444]

Originally Posted by bcrdukes

No. The only people who benefit are Verizon's shareholders.

i suppose you like paying some of the highest rates in the western world for sub par cellular service...

well i don't, and i welcome ALL competition - let's open this puppy up and have US and UK quality & price in our cellular service

[bcrdukes]

Originally Posted by 4444

i suppose you like paying some of the highest rates in the western world for sub par cellular service...

well i don't, and i welcome ALL competition - let's open this puppy up and have US and UK quality & price in our cellular service

Please.

Don't be so naive.

[saveth]

Sub par cell service? I think my service is awesome. What makes Canadian telecom sub par?
Posted via RS Mobile

[Gnomes]

Verizon's plans arent exactly that cheap. Cheapest data plan is $40 for 300mb, $50 for 1gb, $60 for 2gb, PLUS $40 for voice.

[4444]

Originally Posted by saveth

Sub par cell service? I think my service is awesome. What makes Canadian telecom sub par?
Posted via RS Mobile

depends where you are - 2 of my close families' houses effectively get 10%-20% cell phone coverage - these are in well established areas (not the middle of butt fuck nowhere)

1 gets maybe 1/2 bars.

i'm ok downtown... but not in my office (downtown) as it's high up.

[4444]

Originally Posted by bcrdukes

Please.

Don't be so naive.

no naivety here - i've lived in all 3 countries, canada has the highest prices (which is true for pretty much everything, and we pay the most personal tax) and, what i've found, the worst service.

i fully attribute this to government intervention forcing a lack of competition.

bell, telus, and rogers are about to have their arses handed to them. the most efficient indicator says so - the stock market. all three got hit HARD on this news - which tells you there is excess capacity in the market for verizon to come in and take significant market share.

[Lomac]

Originally Posted by 4444

no naivety here - i've lived in all 3 countries, canada has the highest prices (which is true for pretty much everything, and we pay the most personal tax) and, what i've found, the worst service.

i fully attribute this to government intervention forcing a lack of competition.

bell, telus, and rogers are about to have their arses handed to them. the most efficient indicator says so - the stock market. all three got hit HARD on this news - which tells you there is excess capacity in the market for verizon to come in and take significant market share.

Verizon Wireless has three times the population of Canada as a membership base, which is a mere 33% of the total American population that owns a cellphone. Canada has only 35 million people in the world's second largest country. As a result, building a network to support such a (relatively) small population in as large of a country as Canada means prices need to be higher in order to compensate for having towers to service small towns in the middle of nowhere.

[syee]

I'm assuming Verizon planning on taking over Wind/Mobilicity's spectrum and build on top of that? Their coverage is marginal at best so I foresee them having to invest billions to build up something that matches the competition. The huge entry cost seems like a bit of a gamble and maybe not so financially viable for what will initially only amount to 10% of the market. Verizon's got deep pockets though so who knows...

[4444]

Originally Posted by Lomac

Verizon Wireless has three times the population of Canada as a membership base, which is a mere 33% of the total American population that owns a cellphone. Canada has only 35 million people in the world's second largest country. As a result, building a network to support such a (relatively) small population in as large of a country as Canada means prices need to be higher in order to compensate for having towers to service small towns in the middle of nowhere.

Except the majority of people live within 100 miles of the border.

In big cities, I expect a perfect service, I don't get that.

Also, those in non prime locations should pay more, it's simple supply and demand, little demand outside of major hubs, this should pay more - same can be said about airlines (major routes subsidize the routes to the middle of nowhere, hence less competition allowed) - its quite a vicious circle

[Verdasco]

please come so every company tries to lower their prices etc. etc..... good for consumer imo

[LiquidTurbo]

Woudl this mean that data could work across the border with no roaming charge ?

[Gridlock]

I don't know what others are doing with their phones, but I'm with Fido...the one that is supposed to be shit in the cell world, and I never have a dropped call or any issues at all.

They call up every once and while wanting to sell me a new phone, and I give them the same speech, "everyone else cares about my cell phone far more than I do"

They FO and leave me alone for a year.

Do some people want their cell phone companies to blow them for their business or what?

[trancehead]

most people want the latest and greatest...to do what? post on instragram , twitter, vine, whatever the fuck it is now

oh and maybe catch some shows streaming at LTE speeds

i would say a small minority use it for business purposes, but the majority use it to whore themselves beyond recognition. and now we get a generation of socially inept device addicts

[godwin]

Fido is just the cheapo brand for Rogers. Nothing wrong with it.

Basically you are right.. people are greedy.. they want everything for free if they can.

Originally Posted by Gridlock

I don't know what others are doing with their phones, but I'm with Fido...the one that is supposed to be shit in the cell world, and I never have a dropped call or any issues at all.

They call up every once and while wanting to sell me a new phone, and I give them the same speech, "everyone else cares about my cell phone far more than I do"

They FO and leave me alone for a year.

Do some people want their cell phone companies to blow them for their business or what?

[Spoon]

Seems like every Canadian's ready to welcome foreign investments into Canada as long as they get 5 bux knocked off of their monthly bill.

[willystyle]

Here is a more realistic approach:

If Verizon purchases WIND and gets approved by the federal regulatory (which I don't see why not), they will not be a low cost carrier like WIND and Mobilicity started out when they set foot into this country because Verizon brings an arsenal of weapons that they possess that the incumbents don't have to effectively compete (Buying power, U.S. NETWORK, EXCLUSIVE carrier handsets). Verizon is a bigger company and generates more money than the Big 3 combined.

Buying Power: Much like back in early 2000's when Nokia N95 was released, Rogers was the only network at that time in Canada to carry it. Much the same could be said about Verizon, they could request Samsung to only release a popular phone that they would carry in Canada (and nobody else), and basically tell Robellus to fuck off. If Samsung doesn't offer exclusivity for a particular phone in Canada, they would not carry that phone in the States. That's 100 million inaccessible Verizon US customers vs. 20 million Big 3 Customers in Canada that Samsung may potentially lose (and honestly, who knows if that number will still be that high when Verizon is here). It's easy math.

U.S. Network - Verizon could break down the virtual border and unite their U.S. network with the Canadian network and get rid of roaming entirely, or the more realistic approach is to charge very inexpensive voice and data roaming fees to their existing customers. In reality, it doesn't cost them anymore money to provide free roaming, it's just a cash grab cause they own all of the towers anyway. However, none of the incumbents in Canada can compete in this regard on any level (and Verizon knows that), and could never offer U.S. roaming rates as low as Verizon because they don't own any towers in the U.S. This alone would be popular among many Canadians and many frequent business travelers to the U.S.

HATRED: Let's be honest here, Rogers, Bell and Telus are among the most hated corporations in Canada. Many would jump-ship to Verizon (if they had a decent network) just to give a middle-finger to the Big 3, even if they charge the same or slightly more for a better product/service.

PRICE: I can envision that Verizon will charge slightly less in the beginning and offer more services than the incumbents to attract more customers. But in the long-run, they will be priced the same, if not more than what Robellus offers just because they will offer a better product and service overall. Just take a look at the Verizon's business model in the U.S. now, they are one of the most expensive carriers (if not the most expensive).

I really want Verizon to be that player that could come in and change the landscape and offer better products and services at GREATER VALUE. I really want that to happen, but in reality, when was the last time a U.S. corporation has offered that in Canada? None!

[Culverin]

Originally Posted by willystyle

HATRED: Let's be honest here, Rogers, Bell and Telus are among the most hated corporations in Canada. Many would jump-ship to Verizon (if they had a decent network) just to give a middle-finger to the Big 3, even if they charge the same or slightly more for a better product/service.

The fact that retentions are even allowed, then exploited by robellus pisses me off.
Even if Verizon would do the same, as long as all things are equal, I would gladly switch just to be rid of the arrogance of Rogers.

[FerrariEnzo]

I imagine the prices of Verizon would be cheap at first to LURE subscribers, once they gain marketshare.. prices will be adjusted according to marketshare worth.. Plus Verizion needs to setup and roll out LTE, as they have completed LTE rollout in America.. theres no sense to keep AWS HSPA+, Verizon wants to to VoLTE.. so for them to go straight to LTE would be the best way.. Until then Winds coverage would most likely be the same....

Verizon wants Wind and Mobi.. Im sure they are in talks with Shaw for their AWS spectrum as well, since its not really finalized Shaw-Rogers deal, still needs to be approved.. lol and I doubt the gov. will approve it since its not 5 years yet.. if Verzion puts a better deal on the table, Shaw might jump on it...

Originally Posted by willystyle

U.S. Network - Verizon could break down the virtual border and unite their U.S. network with the Canadian network and get rid of roaming entirely, or the more realistic approach is to charge very inexpensive voice and data roaming fees to their existing customers. In reality, it doesn't cost them anymore money to provide free roaming, it's just a cash grab cause they own all of the towers anyway. However, none of the incumbents in Canada can compete in this regard on any level (and Verizon knows that), and could never offer U.S. roaming rates as low as Verizon because they don't own any towers in the U.S. This alone would be popular among many Canadians and many frequent business travelers to the U.S.

The handsets offered by Wind/Mobi wouldnt work on Verizon network, they run on EV-DO (CDMA band), so no roaming on Verizon US networks...
Which is why if the purchase goes through, Verizon would be pushing for LTE and VoLTE instead to fix the current AWS HSPA network..

[Zedbra]

Well, Verizon used to own 20% of TELUS up to 2004, right smack in the middle of huge fees, expensive phones, and expensive plans. Profit is profit, and the big guy won't leave anything on the table. I wouldn't expect this to be a savior to the Canadian cell market