Verizon Wireless says it's still eyeing the possibility of entering Canada's wireless market.
"We continue to explore and have discussions, but at this point it's really just an exploratory exercise," said Verizon's chief financial officer Francis Shammo during a conference call Thursday.
The company said it sees ripe opportunity in Ontario and Quebec, the country's most populated provinces, which are also adjacent to Verizon's U.S. properties.
Verizon is also interested in participating in a January spectrum auction for the 700-megahertz frequency.
"It mirrors up exactly with what we launched here in the United States," said Shammo.
However, he cautioned that Canada's regulatory environment and rules around foreign takeovers could pose challenges.
Ottawa recently began allowing foreign takeovers of telecom companies that have a 10 per cent or less share of the market.
Verizon has reportedly been in talks to acquire startup carrier Mobilicity, and there are reports it has made an initial $700-million offer for Wind Mobile, another of Canada's small telecoms.
Maher Yaghi, an analyst at Desjardins Securities, said if Verizon decides to enter the Canadian wireless market, it could have a huge impact on incumbents BCE Inc. (TSX:BCE), Rogers Communications Inc. and Telus Corp. (TSX:T).
"Verizon has very, very deep pockets," said Yaghi.
"We're used to saying Bell and Telus and Rogers (TSX:RCI) are big companies and they make a lot of money, but if they go up against Verizon — it's not an even fight."
The entry of Verizon could have a material impact of 10 to 18 per cent on the incumbents' stock prices, Yaghi wrote in a report.
And if U.S. giant Verizon provides coast-to-coast service north of the border, it could snatch up as much as 10 or 15 per cent of the market after a few years, he said.
"Verizon still doesn't have all the pieces in place to enter the Canadian market," said Yaghi.
"I think they need to figure out a few things first. On the regulatory side, they want to make sure the spectrum auction stays as presented by the government right now. They don't want any of the rules to change."
The current rules on the sale or transfer of radiowaves used to operate cellphone networks don't allow incumbents to bid on and win more than one block, but this doesn't apply to new entrants, said Yaghi.
"The rules were set up for small entrants, to entice them to come to Canada, but maybe not a big company like Verizon," he added.
Telus Corp. called on Industry Canada to level the playing field so that a "foreign behemoth" like Verizon doesn't have an unfair advantage over incumbent Canadian carriers.
"We welcome competing with anyone, even an international giant such as the Verizon organization," said Josh Blair, the company's chief corporate officer.
"We just believe it needs to be on a fair basis and on a level playing field. They should be treated the same way as Telus or Bell or Rogers when it comes to the acquisition of spectrum, for example."
Verizon's comments Thursday came as the wireless company reported its latest quarterly results.
The largest cellphone carrier in the U.S. added 941,000 devices to its contract-based plans in the April to June period, exceeding analyst estimates and continuing a strong run. It boosted service revenues by 8.3 per cent from a year ago. Its closest rival, AT&T, is seeing revenue increases of around four per cent.
Almost all of the gains on the wireless side were due to customers upgrading to higher-priced plans or adding more devices to their plans, as opposed to an influx of new customers.
Analysts saw some weakness in the results, pointing to a decline in the profit margins on the wireless side, and Shammo's comment that the rate of device upgrades would be roughly the same as last year. Because the company subsidizes each new smartphone by hundreds of dollars, frequent upgrades are costly.
Verizon shares fell $1.07, or 2.11 per cent, to US$49.67 in mid-afternoon trading on the New York Stock Exchange. It was the first time the shares went below US$50 this month. The shares had hit a 12-year high of US$54.31 on the last day of April.
Net income at Verizon Communications was US$2.25 billion, or 78 cents per share, up 23 per cent from a year ago, the company said Thursday. Excluding a pension-related gain, earnings were 73 cents per share. That beat the average estimate of analysts polled by FactSet by a penny.
Revenue was US$29.79 billion, up more than four per cent from a year ago and in line with analyst expectations.
New York-based Verizon Communications owns 55 per cent of Verizon Wireless, which means that only that percentage of its profits flow to its bottom line. The rest goes to joint venture partner Vodafone Group PLC, a British cellphone company with wide-ranging international interests.
Verizon Communications has a long-standing interest in buying Vodafone out of Verizon Wireless, and analysts expect a deal could be reached later this year.
—With files from the Associated Press
Earlier on HuffPost:
Designed by <a href="http://www.yankodesign.com/2009/08/18/phone-that-shames-the-weather-bureau/">Seunghan Song</a>, this "window phone" concept will reflect current weather conditions on the screen. To input text, you just blow on the screen to switch modes, then write with your finger as a stylus.
<a href="http://petitinvention.wordpress.com/2009/11/20/cobalto-zafiro/">Mac Funamizu's "Cobalto"</a> has taken the cell phone concept way into the future, with an almost all-glass design. The phone would feature 3D imaging that could make Google Maps even more useful, as demonstrated here.
<a href="http://www.behance.net/Gallery/leaf-phone/325190">Anastasia Zharkova's organic "Leaf Phone"</a> melds aesthetic creativity with functionality. The winding stem of the leaves could be wrapped around a user's arm, wrist, neck, or other body part.
<a href="http://www.yankodesign.com/2009/12/03/sticky-phone/">Liu Hsiang-Ling's "Sticker Phone"</a> has a solar panel on the back of the phone and a curved surface that will allow it to stick to a window via suction to charge. Plus, you won't lose your phone somewhere on your desk.
A pop-up phone! <a href="http://www.yankodesign.com/2009/06/08/phone-ear-phone-phone/">Ilshat Garipov's "Kambala" </a> is a fascinating concept that features a center piece that can pop out to fit into your ear, making it an earphone. In theory, it will also have the ability to match your skin tone, rendering it almost invisible.
<a href="http://www.behance.net/Gallery/PACKET-phone/162229">Emir Rifat's "Packet" phone</a> won first place at the Istanbul Design Week 2007. The tiny phone starts off at 5 cm square, then folds out as needed for different functions.
<a href="http://www.yankodesign.com/2009/11/30/phone-fashion/">Jung Dae Hoon's "Dial"</a> concept takes the rotary phone of the 'good ol' days' and combines it with mobile technology and modern jewelry sensibilities.
Nokia's "Morph" phone uses nanotechnology to create a flexible body and transparent screen that can be molded to whatever shape is the most convenient for its user. The nanotech could even clean itself.
Natural Year Phone
People tend to keep cell phones for only two years, and <a href="http://www.yankodesign.com/2008/12/08/now-thats-a-grassy-phone/">Je-Hyun Kim’s Natural Year Phone</a> concept takes that into consideration. The phone is designed to naturally biodegrade after the two years are up.
Fujitsu Contest "Pebble" Concept Phone
At first glance, <a href="http://www.engadget.com/2009/10/06/fujitsu-cellphone-design-contest-yields-mind-blowing-results-ha/">this entrant</a> into Fujitsu's cell phone design contest looks like an ordinary paperweight. Actually, it's a cleverly disguised phone. As the picture shows, the small black dot can be transformed into a keypad, media panel or web browser depending on what corner of the plastic handset you drag it to.
<a href="http://www.industrialdesignserved.com/Gallery/Concept-Phone-aoeMobile-Scripta/244692">Aleksander Mukomelov's "Mobile Script"</a> phone starts with a stylish and sleek small screen, then reveals a larger touchscreen hidden within the phone's body to meet all of your media device needs.
<a href="http://www.yankodesign.com/2010/01/25/deaf-phone/">Suhyun Kim's stylish "Visual Sound"</a> voice-to-text concept phone for deaf people is a huge step from current systems like teletypewriters.
Coca-Cola Powered Phone
Forget solar power, electricity, or fuel: <a href="http://www.huffingtonpost.com/2010/01/10/coke-powered-cellphone-am_n_416839.html">Daizi Zheng's concept phone</a> is powered by Coca-Cola.
NTT DoCoMo's prototype "wearable terminal" brings us one step closer to being cyborgs. You stick your index finger in your ear to hear and speak through the microphone at the back of the wristband, then snap your fingers to connect or disconnect the call.
This <a href="http://gizmodo.com/320328/pen-phone-design-is-smallest-yet">pen phone</a> is one of the thinnest and smallest phone designs yet. While it's designed to be connected mainly via a bluetooth headset, the top and bottom of the phone do include a receiver and earpiece.
Nokia Flexible Concept Phone
This Nokia concept is made of memory plastic that can be molded to fit around a wrist, for example, then can be heated to return to it's original shape.
Fujitsu Concept Phone
A concept phone from Fujitsu's cellphone design contest.