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Verizon: Our Interest in Canada is 'Exploratory'
Would Aim For Area Between Toronto and Quebec
Back in June, reports surfaced that both AT&T and Verizon were sniffing around the Canadian wireless market, Verizon in particular being rumored as highly interested in buying one of several floundering Canadian wireless market upstarts. Speaking on the company's recent earnings conference call, Verizon CFO Fran Shammo confirmed Verizon's interest in the Canadian market, calling it an "exploratory enterprise":
quote:
Mr. Shammo acknowledged that the Canadian market could be attractive to the New York-based carrier. "If you look at the population of Canada, about 70% of that population is between Toronto and Quebec. That’s adjacent the Verizon Wireless properties," he said, adding that Canada’s upcoming auction of 700-megahertz wireless spectrum mirrors what Verizon launched in the United States.
Verizon is of course wary of Canadian regulation governing foreign investment. Under recent Canadian regulatory changes, a foreign company can own 100% of a business that makes up 10% or less of a market, which would be about what Verizon would hold with an acquisition of Wind Mobile. After that, regulations require that company grow naturally only (read: no mergers and acquisitions).
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Mr Matt
join:2008-01-29
Eustis, FL

Mr Matt

Member

How does Verizon define Exploratory?

Is Verizon's definition of exploratory some form of wireless colonoscopy performed on Canadian customers? Like when they keep adding crap charges to subscribers accounts in the US.

mrherzog
join:2001-05-06
Calgary, AB

mrherzog

Member

Good!!

There's enough corporate interference with Rogers and Belus without big Red coming north.
I'd rather see the CRTC assist Wind in surviving than see Verizon come up here.
Contrary to belief, big American companies don't always make the market better in the long run.
If we had 300 million people then perhaps, but it's just not that simple here.
zod5000
join:2003-10-21
Victoria, BC

zod5000

Member

Re: Good!!

It is a bit tough. We need a competitor up here, but does 4 make a significant dent in the current oligopoly compared to 3. I would be that it wouldn't. Verizon would come up here because the can earn a high arpu.

It's like we just got target up here and it's rather meh. Everyone thought it was going to spark a price war. Like target moved up here to sell everything at cost. They did it because they can change more up here and make more.. lol.
elefante72
join:2010-12-03
East Amherst, NY

1 recommendation

elefante72

Member

Re: Good!!

I live on the border and my company does lots of brokerage business and I can tell you the reason goods cost more are almost 95% because of the Canadian govt and regulations. I can point out a few:

Brokerage - Brokerage fees are higher. Demurrage in Canada is astronomically higher than in the US.

Import duties - ID on simple items like clothes can be 15-30% more

Labor costs - Canadian wages (min) and liability, etc are 70% higher than US counterparts ON the low end--for instance Target. However I can get a rock star computer engineer for half price in Canada. I call it the middle class vortex.

Supply - US has everything in English and Spanish. In Canada it must be English and French at a minimum. This can raise packaging costs for smaller runs

Logistics - Add another 25-40% due to much higher gas cost (due to taxes) and liability, and carry costs.

Straight up IN YOUR FACE taxes -HST (for those in Ontario) are 300% higher than say NY for clothes. Clothes in WNY in 4.75, in Canada HST is 13%.

Regulatory, Tax, Compliance and auditing - Add another 5%, even over the US. CA's in Canada is one industry that make significantly more than US counterparts.

Unions - Supply chain is much more unionized in Canada than in the US, from rail, air, trucking. Easily add another 10%.

Protectionist laws - Canada has strict laws on ownership and tax treatment. This keeps foreign companies from expanding NATURALLY and in the absence of being able to expand they charge much higher margins, and that means higher prices. That can vary greatly depending upon the market.

Discount Culture - I live in Buffalo region and people will spend two hours clipping coupons or waiting until the end of the season to say buy clothes. Anything to get a deal. I can negotiate on almost anything, even in a retail store. That sets a cadence in pricing and general behavior. In Canada if you try to negotiate they make you feel like you are low life trash. Even in Indian stores I get static. You go over to Canada and coupons are non-existent and it's like the retailers would rather keep stock for 2 years or burn it rather than discount them and move the items. The lower stock turns leads to: ding ding higher prices because of the higher carry cost.

Speed and Efficiency - Not saying that Canadians are lazy but they are NOT measured on productivity like US counterparts. Walk into any US retail store and you can find some billboard measuring productivity or x per hour. For instance grocery. If I spend more than 5 minutes in line at Wegmans I get infuriated and when they check me out is lighting fast. Do the same in Sobeys in GTA and the checkout is at least 2x as long and if there are lines, managers will just sit there and watch them pile up. I see it time and time again, it doesn't matter on the store or industry. It's really drastically different if you sit back and compare. I won't get into how much poorer customer service is. That is in your face WAY worse.

Internet competition - In the US amazon, newegg, etc wiped out most electronic stores and almost took down best buy. In canada you dont have the same level of pricing comparison and pressure like in the US. And of course shipping is at least 2x, so forget about free shipping on anything.

A huge benefit for Verizon serving Ontario, and BC is that they are close to the border so for those who frequently travel to the US they could be VERY competitive by eliminating roaming fees and say long distance to/from the US.

I always find it entirely amusing that automobiles are the biggest rip of all. I have brought a few back and forth, and the only difference are a few stickers and the speedo, and maybe the manual. A few hundred at most, but when I bought Sienna in the US I paid $30k and it was XLE super loaded. My cousin in GTA spent $40k for the lowend XL (no leather, nothing) model that cost $24k in the US. Since those items are under NAFTA (no duty), that is just out of this world. Down the street from the rents is a Chrysler plant and they make 300s. My cousins cost $52k in Canada, same one in the US $33k. SAME ONE and made in Canada. He bought it in the US, imported it (no duty) and pocketed $16k.

It's a death my 1000 cuts.

Probitas
@teksavvy.com

Probitas

Anon

A Canadian perspective

No offense intended, but the reason you can move through a store faster south of the border is due to a lack of a living wage making it real easy to hire droves of cheap labor who can barely scrap by, let alone purchase products they help create. You can call it socialism if you want to, but I think we still have our middle class.

Also, those higher taxes pay for a few things that you folk south of the border don't enjoy, like 'free' health care and lower drug prices. Don't knock it until you've tried it. If I'd been an American, I'd probably be dead, or so in hock I'd never get out from under that debt, due to the health issue I have.

Also, only one highway in Ontario I know of that has an actual fee per use, the 407. The rest are part of those taxes you deplore. We like our roads to be pothole free for the most part, it keeps maintenance costs down and prevents regular road closures for months at a time, and allows transport of goods in a straightforward fashion. (FYI, Detroit apparently declaring bankruptcy is probably due to those low taxes you like, it is something I've never heard of happening in Canada).

As far as Verizon coming up here, no thanks. Their idea of servicing customers in not something we need here. We have enough problems as it is with the current incumbents.
keason
Premium Member
join:2002-05-02
Ann Arbor, MI
·Comcast Business
·T-Mobile

keason

Premium Member

Re: A Canadian perspective

It's not just the difference in wages. US labor is generally more expensive in many industries due to health care costs. It's mostly that Canada has a smaller population and a lower population density which makes distribution more expensive.

That being said, Canadian companies are not as efficiently run as in the US. The government sector is larger. As for car pricing, I agree- Canadians are massively overcharged by some companies. Others are similar in price to the US. Auto companies charge more because they can.

A combined US-Canadian cell company (or a marketing/technology alliance) would be a boon to anyone living near the border or traveling frequently. ATT used to have a combined plan, so did Bell but they disappeared in the 1990s. Canadian cell pricing is high and archaic (many carriers still have 'regional' and 'long distance' charges). The Canadian market could use some additional competition. Carriers should have done this long ago.