NEW YORK CITY (dpa-AFX) - Verizon Communications Inc. (VZ) is reportedly in talks to buy one or two Canadian mobile phone carriers, as part of its efforts to enter the Canadian market. The news dragged down shares of large Canadian telecom companies in Wednesday's trading on the Toronto stock Exchange.
According to media reports, Verizon has signed a nondisclosure agreement with Mobilicity, a small upstart wireless carrier in Canada, in preparation for talks over a possible deal. The company is also reported to have submitted an initial offer for Wind Mobile, a Totonto-based rival startup.
Wind Mobile is a new entrant in Canada's wireless market, having about 600,000 subscribers. Verizon's bid for Wind Mobile would value the startup at about C$700 million, according to Canada's Globe & Mail newspaper.
The Canadian government has been pushing for greater competition in the wireless sector and recently eased rules that limit foreign ownership.
The Canadian market is dominated by three large players BCE Inc.'s (BCE, BCE.TO) Bell Canada unit, Telus Corp. (TU, T.TO, T_A.TO) and Rogers Communications Inc. (RCI, RCI_A.TO, RCI_B.TO), which together control about 90 percent of the market. Earlier in June, the Canadian government blocked Telus' C$380 million bid for Mobilicity.
Verizon's market capitalization of $145 billion is almost twice that of Telus, BCE and Rogers combined. Shares of Telus tumbled more than 7 percent, while shares of Rogers Communications declined 8 percent and shares of BCE lost 4 percent on the Toronto stock exchange, on concerns that Verizon will possibly enter the Canadian market.
VZ closed Wednesday's trading on the NYSE at $50.66, up $0.22 or 0.44 percent on a volume of 9.20 million shares.
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