Why did Verizon pass on Canada? - Macleans.ca
 

Why did Verizon pass on Canada?

Jesse Brown considers the issues that may have scared Verizon away


 

Was it something we said?

After all, Canada is a perfectly attractive market! Our wireless industry is worth more than $20 billion a year. We have more than 30 million mobile consumers, all frustrated with current relationships and hungry for something new. We have a government practically begging somebody to come over and give us a twirl. So what gives?

Time for a cold, hard look in the mirror. For all we’ve got going for us, we’re not without our issues.

We have legal issues: Telus is suing the federal government over wireless policy in a bitter fight to gobble up more spectrum. We have union issues: last Friday thousands of members of our two biggest unions, Communications, Energy and Paperworkers and Canadian Auto Workers, rallied in the streets of Toronto against the possibility of a scary foreign wireless company setting up shop on our soil.  We have political issues: sure the Conservatives are desperate to bring in a new provider, but even their reign may not last forever. The Liberals, the NDP and the Bloc Quebecois have all opposed the notion of relaxing foreign ownership restrictions on wireless spectrum in the past.

But the biggest issue might be with our reputation. Verizon was not the first global telecom company Ottawa courted. Our first date was with Orascom CEO Naguib Sawiris, who was talked into launching WIND Mobile here in 2008. It’s a decision he came to regret:

“They take our money and they leave us to the dogs … Anybody who asks me, I tell him, ‘Look, we are the stupid investors that poured a billion dollars into Canada here and created 1,000 new jobs, please don’t do this mistake. Don’t come here.”

If that didn’t put enough stink on us, consider the relentless propaganda campaign launched by the Big Three this summer. It may have done little to turn consumers against Verizon, but the public might not have been the intended audience. The noise might have been to convince Verizon that Canada is a hostile market, rife with regulatory, legal, political and cultural baggage, and just not worth the trouble.

Of course, this is just speculation. Verizon CEO Lowell McAdam didn’t say why he wasn’t coming — he just said he’s “not interested”.  And, hey, maybe it’s not us — maybe it’s them. Verizon just spent $130 billion to buy 45 per cent of Vodafone’s shares in Verizon Wireless. Maybe they just don’t have the cash to make a move right now.

Now that I mention it, there’s an idea! Vodafone looks like it suddenly has shekels to burn. Perhaps Industry Minister James Moore should buy them a drink.

Follow Jesse on Twitter @JesseBrown


 

Why did Verizon pass on Canada?

  1. hope its not going to be a quad-nopoly

  2. Please just get rid of the CRTC as they are the biggest hindrance to a free market.

    • The CRTC was in favor of bringing Verizon up into Canada. Please stop spewing your anti-regulatory nonsense.

      • Rob, The CRTC may have been in favor of this deal but it is not necessary. It was established in a time when we were trying to nurture a Canadian broadcast industry. It is a dinosaur and should be disbanded.

  3. Jesse, using that quote from Orascom’s Sawiris is not fair. That was taken during a time when the Big 3 were challenging the legality of a foreign company bankrolling a new entrant. The government has since come to Wind’s defense and changed the foreign-ownership rules.

    Furthermore, Ottawa has (as Sawiris asked) set aside 2 of the 4 blocks of 700 MHz spectrum to new entrants.

    Quoting Sawiris from before all of this happened gives the impression that Ottawa hasn’t budged to create more favourable conditions to new entrants. That’s not the case. Frankly, I’m surprised Wind hasn’t reversed its position since 2011, and buy up some of the 700 MHz spectrum in the upcoming auction. The 2 major grievances of Sawiris (foreign-ownership rules & setting aside spectrum for new entrants) has taken place. He should be a happy man, and yet…

  4. Honey, get my scythe.