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Sep. 15, 2014, 5:43 PM
- VimpelCom (NASDAQ:VIP) is close to selling its stake in Canadian wireless carrier Wind Mobile Canada to Toronto-based Globalive Wireless Management for ~C$300M ($270M), with an announcement expected as soon as tomorrow, according to various reports.
- A deal would cap VIP's struggle to exit the Canadian market following a lengthy regulatory spat over Canada's foreign investment rules.
- A sale also would boost the Canadian government’s effort to create a fourth national wireless carrier to help foster competition and reduce mobile phone rates; the three biggest carriers, Rogers Communications (NYSE:RCI), BCE and Telus (NYSE:TU), together control 90% of the market.
Jun. 13, 2014, 3:30 AM
- BlackBerry (BBRY) has reached an agreement with EnStream, a joint venture between Canada's three biggest telecom companies — Bell (BCE), Rogers (RCI) and Telus (TU), to provide the infrastructure for a new mobile payment platform.
- Under the three-year deal, EnStream will use BlackBerry infrastructure so banks and mobile operators can securely keep sensitive payment information on any smartphone able to use near field communication (NFC) tags.
- NFC tags permit smartphones to communicate with other mobile devices or credit payment systems by tapping the two together.
Oct. 30, 2013, 1:58 PM
- For the second time this year, struggling Canadian carrier Mobilicity has proposed to sell its spectrum licenses to Telus (TU +0.1%). And for the second time, the Canadian government has rejected the proposal.
- "That transaction has not been approved," said Industry Minister James Moore when asked about the deal. Mobilicity isn't giving up just yet: a spokesman says the company remains in talks with government officials about the matter.
- The latest rejection comes shortly after Telus struck a deal to acquire another smaller/hard-luck Canadian carrier, Public Mobile. That deal has Moore's blessing; antitrust regulators still have to sign off.
Oct. 23, 2013, 7:00 PM
- Telus (TU) is acquiring Public Mobile, a struggling regional carrier claiming 280K subs in parts of Ontario and Quebec. Terms are undisclosed. (PR)
- Canada's Industry Minister has given his blessing to the deal, which gives Telus control of Public's valuable spectrum licenses. The country's Competition Bureau still has to sign off.
- Though Ottawa has been nervous about letting incumbent mobile carriers buy out smaller rivals, their financial struggles, along with Verizon's decision to stay out of the market, could be leading regulators to think twice. The
- The Canadian government blocked Telus' attempt to buy another smaller carrier, Mobilicity, earlier this year.
Sep. 3, 2013, 4:25 AM
- Verizon Communications (VZ) has reportedly started syndicating a $61B one-year bridge loan that will support the company's $130B acquisition of 45% of Verizon Wireless from Vodafone.
- Verizon intends to help pay for the deal with $49B in bonds and $14B in other debt, but might need the bridge loan if it can't issue the bonds by the time the transaction closes, which is expected in Q1 2014. The $63B in funding will replace the bridge loan.
- JP Morgan (JPM), Morgan Stanley (MS), Bank of America (BAC) and Barclays (BCS) are leading the financing and underwriting the deal.
- Meanwhile, Verizon has no plans to enter the Canadian market. The carrier had been linked with a couple of struggling wireless start-ups. The news should be positive for Canada's three largest telecom operators - BCE (BCE), Rogers Communications (RCI) and Telus (TU) - whose shares tumbled in response to Verizon's expansion plans in Canada and then climbed on initial reports of the Vodafone deal.
Aug. 29, 2013, 12:01 PM
- Rogers (RCI +2.8%), BCE (BCE +1.9%), and Telus (TU +2.8%) are all posting solid gains after Bloomberg reported Verizon is in advanced talks to buy Vodafone's 45% Verizon Wireless stake for $130B and plans to partly finance the deal by raising $60B in debt, and Vodafone subsequently confirmed it's talking to Big Red.
- Investors are betting the deal's enormous price tag will make Verizon (VZ +3.4%) hold off on its Canadian expansion plans for now. Verizon already had $49.8B in debt on its balance sheet at the end of Q2, offset only a little by $5.7B in cash/investments.
- The Globe and Mail recently reported Verizon has decided to hold off on making bids for smaller Canadian carriers until a January spectrum auction concludes.
- Meanwhile, Nomura believes even a $130B deal for Vodafone's stake would be accretive for Verizon, since it would still only value Verizon Wireless at 8.5x 2013E EBITDA. The firm thinks Verizon would trade at 7x 2014E EBITDA and 2.3x net debt/EBITDA (a ratio deemed "manageable") following a $130B deal half-paid in cash.
- Judging by today's move in Verizon shares, investors also think the positives outweigh the negatives. Is Verizon getting a good deal on a premium asset - while Verizon's wireline revenue continues to slowly decline, Verizon Wireless is still growing and gaining share - or is Vodafone smartly selling high as U.S. mobile growth slows and competition intensifies?
Aug. 15, 2013, 9:18 AM
- Sources tell The Globe and Mail, which appears to have a good handle on Verizon's (VZ) Canadian expansion plans, Verizon has decided to delay making bids for smaller local carriers Wind (65%-owned by VIP) and Moblicity until a January spectrum auction is finished.
- The paper adds Verizon "will focus on deciding whether to participate" in the auction. The change of heart that suggests the carrier could be having second thoughts about expanding north, or might simply be trying to drive a harder bargain (either with the carriers or regulators).
- A previous report claimed Verizon had made a ~$700M offer for Wind, and had held talks with Moblicity.
- BMO has argued a Canadian acquisition would pay for itself just via roaming fee savings. Incumbent Canadian carriers (BCE, RCI, TU) have been less than thrilled about Verizon's plans, and apparent government support for them.
Jul. 29, 2013, 12:01 PM
- A group representing 150 Canadian CEOs has sent a letter to PM Stephen Harper asking him to reconsider new mobile investment rules they claim would give would-be entrant Verizon (VZ +0.6%) and unfair edge over incumbents BCE (BCE +0.3%), Rogers (RCI +1.1%), and Telus (TU +0.9%).
- The incumbents have already been aggressively lobbying Ottawa to fix perceived loopholes in telecom policy they claim benefit outside giants, rather than smaller carriers.
- Verizon, possibly motivated by the potential for huge roaming fee savings, is believed to be eying the purchase of struggling Canadian carriers Wind and Mobilicity, whom the incumbents can't acquire due to spectrum rules.
- Big Red is also considering taking part in a Jan. '14 spectrum auction; the rule changes would allow it to buy more spectrum than the incumbents.
Jun. 28, 2013, 12:29 PMThe Canadian government says it will review all carrier spectrum transfers, a decision that appears spurred by recent spectrum purchase deals (I, II) from Rogers (RCI +1.3%) and Telus (TU +2.9%). The decision comes shortly after the government blocked Telus' attempt to buy smaller rival Moblicity; Moblicity's spectrum was the main prize in that deal. Rogers, Telus, and BCE (BCE +2.8%) are all trading higher today after slumping earlier this week on a report Verizon had bid $700M for Wind Mobile. | 2 Comments
Jun. 17, 2013, 9:33 AMVerizon (VZ) wants to enter the Canadian mobile market, and has "held exploratory talks" with minor local carrier Wind, The Globe and Mail reports. The Canadian government, fresh off relaxing foreign investment limits, is said to view Verizon "as the most likely foreign option" for bolstering competition in a market dominated by Telus (TU), Rogers (RCI), and Bell (BCE); ideally, Verizon would buy a small local carrier, then take part in upcoming spectrum auctions. Russia's VimpelCom (VIP), the biggest investor in Wind, wants to sell its stake for $500M+. Telus' efforts to buy another small rival, Moblicity, were recently blocked by Ottawa. | Comment!
Jun. 4, 2013, 10:30 PMCanadian telecom Telus (TU) in mid-May agreed to purchase rival Mobilicity for $380M; today the Ottawa government said no. Though Mobilicity debtholders had already signed off on the deal, which would have provided continuous coverage for the company's wireless customers, the Canadian government intends to uphold the rule under which new carriers such as Mobilicity were issued spectrum to increase competition - it cannot be sold until 2014 at the earliest. Telus expressed disappointment but seems to accept that the plug has been pulled. | Comment!
Jun. 6, 2012, 9:07 AMU.S. hedge fund Mason is hawking around its almost 19% stake in Canadian telecom carrier Telus (TU), which is worth $2B, The Globe & Mail reports. However, any interested foreign operator might be hampered by restrictions on non-Canadian ownership of telecom providers, rules that aren't set to be relaxed any time soon. | Comment!
Mar. 16, 2012, 4:52 PMAs Canadian telco BCE makes a big media purchase, the Canadian government announces it's lifting restrictions on foreign investment in the telecom sector. The move could lead AT&T (T) and/or Verizon (VZ) to mull investments in Canadian carriers; AT&T has been evaluating its options for deploying its cash since the T-Mobile deal fell apart. | 3 Comments
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