Fast forward to 2013 and things aren't looking so great. The original CEOs for both companies are long gone, WIND has already been acquired by VimpelCom, and Mobilicity is shopping around for a buyer. Both companies left the Canadian Wireless Telecommunications Association when it became clear to them that the industry body was just a mouthpiece for The Big Three.
Canadians have spoken with their wallets and sadly these plucky little underdogs aren’t making it through the long haul. Though TELUS has been sniffing around Mobilicity and Rogers around WIND, they may be out of luck because the AWS spectrum WIND and Mobilicity use was set aside during their sale specifically for new entrants, and still unusable by an incumbent carrier (like Rogers or TELUS) in an acquisition scenario for five years after the original spectrum purchase. Well, more Canadian spectrum is going up for auction this January, again with bidding priority given to smaller players in the name of promoting competition. This time, we were hoping to have a more prominent buyer coming to the table: Verizon.
We all know Verizon as a heavy-hitter in the American wireless marketplace. Moving into Canada would have been an attractive option for Verizon, since they have more resources than the entire Canadian wireless industry combined, there’s an opportunity to snag fresh spectrum unopposed, and face an easy transition for customers roaming across the border. They wouldn't even see any boundaries with the 10% revenue share limit, provided they got there without acquiring any other service providers. The path for Verizon to buy into Canada had been paved by WIND’s foreign ownership history. Such a move would have provided Verizon with a working network, retail locations, a few customers (less than a million), and front row seats for the upcoming spectrum auction.
Now, a lot of Canadians were really excited about a new entrant with enough money to push hard against Rogers, Bell, and TELUS. Keep in mind that these three have been vilified by Canadian consumers for some time, and in many cases, with good reason. Those three have been wailing in unison at the mere prospect of Verizon coming north. Meanwhile, WIND and Mobilicity customers just want to hang onto their absurdly cheap promotional plans for as long as possible. I think many Canadians have become too comfortable with associating "new entrant" with "desperately low prices", however.
In order to make the teeny, tiny dent in the market share held by Rogers, Bell, and TELUS, WIND and Mobilicity have had to make some significant sacrifices, namely in terms of not locking customers into long-term contracts. There’s a good reason these two are on the auction block: nobody's biting at unsubsidized devices, even if customers save money over the long term. WIND eventually buckled and launched a tab plan. To those that expected more of the humane standards WIND and Mobilicity introduced to Canada, I ask this: if Verizon had decided to set up shop in Canada, what good reason would they have had to adopt the business model of the two failed companies that came before it?
If Verizon had set up shop in Canada, why would they adopt the business model of the two failed companies that came before it?
Canadian prices are high, regardless of what the Big Three might say, but Verizon's prices in the US aren't that much lower, and in some cases identical. For $80/month on both Verizon and Rogers, you get 500 MB of data and unlimited nationwide talk and text. Then there are two-year contracts; those had to be federally mandated in order to get Rogers, Bell, and TELUS to adopt them, but for Verizon it's old hat. It would have been easy for Verizon to be competitive simply by replicating the U.S. model in Canada, or (and this sounds more likely) they could have cashed in and played by the precedent set by Robellus.
Even if they had made it up here, I don’t see a Verizon-led Canadian wireless future as the consumer-friendly utopia that WIND and Mobilicity have envisioned and marketed. As is, Rogers, Bell, and TELUS play pretty nicely with one another. By contrast, when was the last time you saw AT&T, Sprint, Verizon, and T-Mobile agree on anything? Verizon is a profit-driven company just like the existing big players in Canada. The only difference is that Verizon operates at an exponentially larger scale than these Canadian carriers. That said, Verizon would have had no reason to conform to the expectations of the existing marketplace. Maybe that independence is why the Canadian carriers weren’t happy about what was looming on the horizon.