POLITICS

Harper says there are no special rules for foreign wireless companies

08/29/2013 04:16 EDT | Updated 10/29/2013 05:12 EDT
TORONTO - There are no special rules or loopholes for foreign companies looking to enter the Canadian wireless market, Prime Minister Stephen Harper said Thursday.

"There are rules that assist all new entrants whether they be Canadian or foreign to enter the market and provide competition that will be in the interest of Canadian consumers," Harper said.

The prime minister made the comments amid speculation that U.S. company Verizon may want to expand into the Canadian wireless business.

Canada's big wireless providers — BCE (TSX:BCE), Telus (TSX:T) and Rogers (TSX:RCI.B) — have launched a campaign arguing that big foreign players like Verizon would be given an unfair advantage due to current wireless rules.

New wireless companies are permitted to bid on two blocks of prime 700 megahertz spectrum in the upcoming auction while the big three domestic carriers can bid on only one block apiece.

The big three Canadian carriers would also have to come to a financial arrangement with Verizon for letting its customers roam on their networks in areas where it doesn't have coverage.

"I understand full well the desire of the major incumbent telecommunication companies to protect their bottom line," Harper said.

"But the responsibility of the government is to act in the broader public interest. That broader public interest here is absolutely clear."

The Conservative government recently eased the rules on foreign investment or wireless companies with less than 10 per cent of the marketplace, paving the way for foreign companies to enter the Canadian market and also buy small Canadian wireless companies.

For its part, Verizon in July said it was taking a look at the Canada.

"We continue to explore and have discussions, but at this point it's really just an exploratory exercise,'' Verizon chief financial officer Francis Shammo said a the time.

Reports have suggested that Verizon may be considering buying struggling wireless company Mobilicity and or Wind Mobile.

On Thursday, Britain's Vodafone PLC said it was in talks with Verizon Communications about selling its 45 per cent stake in Verizon Wireless. Verizon Communications owns the other 55 per cent.

Analysts have suggested that Verizon wants to pay around $100 billion for Vodafone's stake, although reports have said that U.K. group is pressing for as much as $130 billion.

Last spring, Telus was blocked by Industry Canada from buying Mobilicity because the small carrier's spectrum licence doesn't expire until 2014.

Telus chief corporate officer Josh Blair noted the current rules are meant to help small new entrants not companies like Verizon.

"Verizon is a company 13 times the size of Telus," he said. "It really doesn't need any special advantages."

— By Craig Wong in Ottawa