TORONTO – A new study released Thursday by Moody’s Investor Service suggests that Verizon would face more significant barriers to entry into Canada than just the heated protestations of the big three incumbents.
Even if Verizon were to enter the Canadian wireless market by taking advantage of the so-called “loopholes” in Canada’s wireless policy, it would require a large time and financial commitment to develop the top-quality network it would need to compete with the incumbents.
Those large entry costs would preclude any newcomer’s ability to wage a price war with its Canadian competitors, Moody’s says.
Even if Verizon were to acquire new entrants like Wind Mobile, Mobilicity and Public Mobile, their collective market share is only about 10% and would provide Verizon with limited network infrastructure compared to other Canadian wireless operators.
“A battle for market share likely would be based on user experience, which would require the development of a top-quality network,” said Moody’s SVP Bill Wolfe in a release. “We estimate it would take four to five years to develop a profitable company, giving existing players plenty of time to respond.”
