U.S. telecom giant may not sell wireless in Canada, but it’s quickly becoming a media force.
Verizon In Canada:
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Remember how Canada’s telecommunications companies lost their collective minds three years ago when U.S. giant Verizon showed signs of coming north?
Well, it happened – but not in a way that has caused much concern, yet. There is certainly no air of panic currently surrounding Bell, Rogers and Telus, since Verizon hasn’t entered Canada in the interest of eating their wireless lunch, as they feared it would.
The U.S. company’s entry instead came quietly last year via its acquisition of AOL and its media properties, which includes Huffington Post Canada. Verizon now stands to expand its presence in Canada through its $4.8 billion acquisition of web pioneer Yahoo, which includes Yahoo Canada.
AOL has more than 100 employees in Canada, while Yahoo Canada has between 25 and 30 editorial staff, as well as an unknown number of support employees.
Verizon says it is too early to comment on Yahoo Canada’s future.
“We’re focused on doing the integration planning, which will take several months,” a spokesperson said in an email. “The transaction also needs regulatory approvals and Yahoo shareholder approval before closing.”
Sources at both AOL and Yahoo Canada say there have been no indications of changes at their respective companies yet.
The potential of Verizon’s entry into Canada’s wireless market through an auction of government airwaves sent shockwaves through the industry in 2013. Canadian wireless carriers lobbied government, the media and even the public against the possibility, warning that it would have dire consequences on their future network investments.
Verizon ended up deciding against a venture north, opting instead to buy out British carrier Vodafone’s stake in the company, but not before sparking a harsh war of words between Canadian carriers and the Conservative government at the time.
Then-industry minister James Moore slammed Canada’s companies as being “dishonest” and “misleading” in their campaign against the U.S. company. The government insisted that more carriers – whether Verizon or whoever – would lead to better wireless services and prices.
Verizon may not be selling cellphones in Canada, but its growing presence and influence shouldn’t be taken lightly. In announcing the Yahoo acquisition last month, chief executive Lowell McAdam spelled out the company’s ambitions:
“By acquiring Yahoo’s operating business, we are scaling up to be a major competitor in mobile media. Yahoo’s operations provide a valuable portfolio of online properties and mobile applications, which attract over 1 billion monthly active consumer views. It also brings market-leading content, brands in sports, finance, news, and email into the portfolio. It expands our analytics and ad tech capabilities and enhances our competitive position and value proposition to advertisers. We are already seeing enthusiasm from partners in sports, news, and finance to leverage this scale in the future.”
Canadian wireless providers – particularly Bell, Rogers, Videotron and Shaw, through its acquisition of fourth carrier Wind – are also major media companies. They may not be competing with Verizon on telecom services, but it’s increasingly looking like they may have a powerful new rival on a different front.
That begs the question: If Verizon does decide it wants to be a media player in Canada, how long will it be able to do so without having its own networks on which to deliver its content?