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Consumers could face price creep with Verizon not coming to Canada:analysts

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(Globalpost/GlobalPost)

Cellphone customers may eventually face higher prices and less choice now that U.S. giant Verizon isn't interested in entering Canada's wireless market, say analysts who are warning of price creep for consumers.

The prospect of Verizon's entry produced more options for Canadian consumers with the big three carriers offering data sharing plans, previously unavailable for smartphones and tablets, telecom analyst Iain Grant said Tuesday.

"If nothing else, even the spectre of Verizon coming here was enough to change pricing in the Canadian market," Grant said.

"Without Verizon, will prices creep up? I think, sadly, the answer is probably yes."

Shares in Rogers, Bell and Telus surged on news that Verizon said Canada is "off the table at this point."

Verizon Communications Inc. said Monday it was no longer interested in entering the Canadian wireless market after announcing it would pay US$130 billion for the 45 per cent stake in Verizon Wireless owned by British cellphone carrier Vodafone.

Grant noted that the three Canadian carriers now allow households to choose the amount of data they want to use and share one monthly data plan, an option Verizon, AT

"Thanks Verizon. Even just clearing your throat got us better prices for data sharing," said Grant, managing director at the SeaBoard Group.

But analyst Troy Crandall said he doesn't expect Canada's big carriers to bring in price hikes anytime soon. He said the three are competitive and recognize consumers have limits to their monthly telecom budgets.

Crandall said consumers were largely forgotten in huge publicity campaign against Verizon by Bell, Telus and Rogers.

The telecoms argued that the upcoming auction of wireless spectrum _ radio waves needed to operate cellphone networks - favoured foreign competitors and put Canadian incumbents at a disadvantage. The government wanted to increase competition for consumers by having four wireless carriers in each of the country's regions.

"It just seemed like the consumer was an afterthought in the whole fracas," said Crandall, of investment firm MacDougall, MacDougall and MacTier.

"There was never any indication of how blocking Verizon coming into Canada was going to help the consumer."

The deadline for companies to sign up for the wireless spectrum auction in January is Sept. 17 and, with Verizon out of the running, there are no obvious foreign carriers to compete with Rogers (TSX:RCI.B), Telus (TSX:T) and Bell (TSX:BCE).

Industry Minister James Moore's office said there were no plans to delay the auction or change the rules that give foreign bidders access to bid on two blocks of prime 700 megahertz spectrum while the three domestic carriers are held to bidding on one block apiece.

Telus executive Josh Blair said the Vancouver company will continue to push for fair access.

"We are still very concerned about the upcoming auction because any international giant could come in even though Verizon has confirmed they will not," said Blair, chief corporate officer at the Vancouver telecom.

http://www.globalpost.com/dispatch/news/the-canadian-press/130903/will-consumers-face-price-creep-now-verizon-isnt-coming-cana