Verizon still exploring possibility of entering Canada's wireless market

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Verizon still exploring possibility of entering Canada's wireless market

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 chief financial officer Francis Shammo during a conference call Thursday.

The company said it sees ripe opportunity in Ontario and Quebec, where most of the country's population is located.

The provinces are adjacent to Verizon's U.S. properties, Shammo said.

Verizon is also interested 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.

The company's comments Thursday came as Verizon 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 $1.22, or 2.4 per cent, to $49.52 in morning trading. It was the first time the shares went below $50 this month. The shares hit a 12-year high of $54.31 on the last day of April.

Net income at Verizon Communications was $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 $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

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