It looks like big U.S. cellphone companies aren’t answering a call from the federal government to head north and compete with our local giants.
With a deadline come and gone this week for interested parties to put down a small deposit to participate in an auction early next year for cellphone airwave licences, Verizon, AT&T, Sprint and T-Mobile – the major players in the United States – have taken a pass, according to one expert.
Jeff Fan, a telecommunications stock analyst at Scotia Capital says he has confirmation that none among the four submitted applications earlier this week to participate in bidding on radio waves needed to operate cellphone networks in Canada.
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Their collective decision was based on their assessment that there wasn’t sufficient profit to be made in a market dominated by three entrenched carriers in Rogers, Bell and Telus – the main reason Verizon publicly shot down the notion earlier this month.
A regulatory environment fraught with uncertainty also weighed, the analyst said, as did the threat of potential regulatory backlash in the U.S.
Canadian carriers such as Bell, Telus and Wind Mobile used network equipment designed and manufactured by Chinese vendor Huawei, which has been blacklisted by U.S. authorities over security concerns.
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Fan adds that there is still speculation about other large global carriers taking part in the auction, but says he doesn’t believe they would have the same impact on the Canadian market as the big U.S. carriers.
British telecom giant Vodafone is said to have at least taken a cursory look at entering the market.
The Harper government has attempted to attract investors or operators who could fund the expansion of a viable fourth carrier in every market across the country through favourable bidding conditions in next year’s auction among other measures.
On Monday, Industry Canada will publish a list of participants who’ve put down a refundable deposit to participate in the Jan. 14 auction.
–with a file from Canadian Press
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