The IT Nerd

I’ve received several e-mails asking the above question. It’s a big deal for a number of reasons:

• First, Verizon is a cell phone company that is much bigger then Bell, Telus, and Rogers combined. That gives them a lot of power to walk in and set up shop in quick order.  As in set up their own infrastructure to allow them to have nationwide coverage equal to or better than the big three. It also gives Verizon the power to fight anything the big three can throw at it.
• Next, Verizon can do something that Bell, Telus, and Rogers cannot do. That is if they were to set up shop here, they could have North American roaming at a price point where the big three Canadian carriers could not compete at. Perhaps even at no extra charge. That would be a game changer.
• Verizon is currently 45% owned by Vodafone who is a British multinational telco. Though that could change. In any case, Verizon likely would not be afraid to use that influence if it had to. Such as having international roaming rates that the big three could not compete with.
• Verizon’s mere existence in this market would give customers who are fed up with the big three Canadian carriers the reason they need defect from them in droves. This would force the big three to lower prices and improve customer service to retain customers. A side effect of this is that it would make retaining customers expensive for the big three. That has a direct effect on their average annual revenue per user which affects their profits. That explains why Rogers, Bell, and Telus stock nosedived when this news hit the wires the other day. Investors clearly see the writing on the wall.
• Verizon previously owned 20% of Telus. So while they were last in the Canadian marketplace in 2004, they aren’t exactly new to the challenges that this market may have.
• If Verizon shows up in Canada, expect other international wireless providers to follow suit. That will put additional pressure on the big three.

Now keep in mind that it is still early days and this this deal may not happen. But you have to believe that with both Wind and Mobilicity looking for buyers and a Canadian government who is all for increased competition in the wireless space, the odds of this deal happening have to be good. Thus this is a very big deal for Canadian cell phone customers who want an viable alternative in the marketplace that provides affordable prices and great customer service.

This entry was posted on June 28, 2013 at 8:48 am and is filed under Commentary with tags Canada, verizon. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.