Verizon’s Canadian Expansion. Will they buy someone? Yeah Telus in Play soon. $VZ $T $BCE $TU $RCI

Last post covered Verizon’s  (NYSE:VZ) political problems as a supposed newbie in the Canadian market. Canadian market is approximately 10% of the US market and is politically stable and relatively close by. Canadians pay their bills on time and on a per capita basis rival and surpass at time American use of e-commerce and telecommunications. So not surprising that Verizon wants in. Wonder why AT&T (NYSE:T) is asleep on this one.

There are three major wireless players in Canada. BCE (NYSE:BCE) which grew out of the traditional phone monopolies. Rogers Communications (NYSE:RCI) which grew out of the cable business and got into wireless as an opportunity. Lastly you have Telus which is the very much smaller player of the three and is based in western Canada. Telus competes nationally on wireless product. George Cope who is now CEO of BCE used to run Telus. It’s always been thought that BCE would swallow Telus and turn the market into a full duopoly. Hasn’t happened as yet. Capital cost is a little high and perhaps the regulators have sent private signals about don’t do that we like to see multiple competitors.

Verizon will probably be blocked at the next spectrum auction. The end game will only allow them to buy one spectrum range and not two. A very good solution for Verizon to achieve significant bulk will be to buy out Telus. The regulator will still see multiple players and political optics will satisfy. Telus will allow Verizon the strategic beach head.

But Telus shareholders will demand the opportunity to auction off their company and maximize shareholder wealth. Which means either Rogers or BCE will step up to the bat and try to write some big cheques. Or another foreign third part dark horse may enter the arena. Still waiting for AT&T to wake up.

In any event Telus will be bought out in the next twelve months for strategic reasons.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter @financialskepti Follow his evil twin who writes Wall Street Murder Thrillers @georgegutowski

Rogers communication Reg FD challenged on bank plan $RCI #mobilepayment #onlinebanking #banks

Rogers Yahoo! Hi-Speed Internet logo

Image via Wikipedia

Rogers Communications (NYSE:RCI) recently applied to become a bank in Canada. Canadians do not need another bank. Rogers is trying to establish a beach head into online banking given its huge internet and cell phone franchise.

OK so maybe it’s a clever strategy. But to start a bank requires more than petty cash and will entail substantial losses. This will be material very material.

So far no press release. Need to disclose Rogers. Open up the Kimono and we all need a quick peak. Keeping the plan shrouded in secrecy and then saying “surprise” does not excite investors some of whom are banks.

Oh wait I’m starting to get it. It’s a surprise attack on the Canadian banking establishment. Hmm that has not been done successfully. Now I’m really getting scared.

Disclosure: George Gutowski writes from a caveat emptor perspective. I am suspicious of people who want to become banks but do not tell you about it. I hold no positions in any stocks mentioned in this post. I have no plans to initiate any new positions within the next 72 hours.

Rogers communication to start a Bank $RCI #mobilepayments #onlinebanking

Rogers Yahoo! Hi-Speed Internet logo

Image via Wikipedia

Rogers Communications (NYSE:RCI) a Toronto based cable oriented company has applied to start a new bank in Canada. Why is this important? Imagine if Comcast or Verizon wanted to become banks imagine the uproar. Well here is a preview.

They will most likely be focused on their smart phones becoming banking instruments. The dream of paying for dinner has just clicked closer. Rogers sells iPhone (Nasdaq:AAPL), Blackberry(Nasdaq:RIMM) and most other phone offerings. Rogers does not have a history of software development so this will prove interesting. Oh by the way they control your TV Cable, high speed internet connection and your landline if you still have one. They even own a baseball stadium and if memory serves me correctly they own the Toronto Blue Jays.

This changes everything.

Disclosure: George Gutowski writes from  a caveat emptor perspective. I do have issues with Rogers and how they treat customers. Badly is my experience. I do not own any positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.