Jock Fistick/BloombergThere's room for a new "strong, strategic" player to enter Canada's wireless market, said a UBS analyst on Monday.Could a new wireless player hop into Canada’s wireless market this year?
Phillip Huang, analyst with UBS, said in a note on Monday that now presents a good opportunity for a new wireless player to make a move and slip into Canada.
“We believe there is currently a good opportunity for a strong strategic player to enter Canada and acquire attractive spectrum and assets at reasonable valuations,” he said.
Mr. Huang sees a few reasons why a new player could jump in now. He says there are multiple small players in Canada that are “motivated sellers of assets”, pointing to Allstream and Mobilicity as two possible examples.
Meanwhile, incumbent players like Telus, Bell and Rogers are not allowed to buy new entrants until 2014, providing an opportunity to buy assets without a heated competition flaring up. As well, Mr. Huang said that the new entrants have limited resources to drive their own consolidation.
Mr. Huang’s note comes as the Canadian federal government announced this month that it would be placing limits on an upcoming wireless spectrum auction of radio waves, capping how much the the biggest telecoms would be able to buy. The government also announced it would be lifting foreign ownership limits for smaller telecom firms.
The spectrum auction, which is expected to take place in early 2013, will include the low-frequency 700 MHz airwaves, which travel further and penetrate walls more easily than other spectrum.
Mr Huang points out that the government’s move to reserve some of the spectrum auction for new entrants also poses a benefit for any new player that decides to come into Canada.
Posted in: Trading Desk Tags: auction, BCE, Bell, incumbents, Mobile, Mobilicity, Rogers, spectrum, telus, wind, wireless
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