Canadian Wireless Market

The Big-3 Canadian wireless market players have been cash cows for a lot of investors over the years. The national market is carved up between three large players – BCE Inc (TSE: BCE), Rogers Communications Inc (TSE: RCI.B) and Telus (TSE: T) controlling approximately 91% of the wireless market, with various other regional players filling in the rest.


As a consumer, Canada is ranked among the ten most expensive countries for wireless services (Source: OECD Communications Outlook, 2013). The Canadian conservative government has been bipolar in trying to balance encouragement of competition and having a protectionist viewpoint roadblocking foreign ownership of local companies or downright blocking some from entering the market. Wind Mobile, a relatively new small player, has had a troubled past with foreign ownership (source) and national security concerns regarding deals with Huawei (source). Earlier this year, Verizon Communications Inc (NYSE: VZ) and AT&T (NYSE: T) decided not to enter the Canadian market after mulling on it for months (Verizon source, AT&T source).

In the upcoming 2014 wireless spectrum auction, all the roadblocks created have resulted in no new foreign telecom carriers planning on entering the market (source), which is bad news for the consumers – as the status quo results in continuation of the eye-gouging rates. However, the Big-3 are the big winners from the news.

The stats for the Big-3 are:

Company Name Ticker Quote P/E Yield Payout Ratio 5-yr DGR Debt/Equity
BCE Inc BCE  $44.51  14.22  5.23% 74.40% 16.74% 1.21
Rogers Comm Inc  RCI.B $45.36 12.49  3.84% 45.50% 14.40% 2.90
Telus Corp T $35.44 18.02  3.84% 66.30% 7.96% 0.95

Of the Big-3, BCE Inc is the most diversified. Click here to read about BCE’s profile when I initiated my position in July.

Disclosure: I am long BCE.

Disclaimer: The information provided here is for educational purposes only. All opinions here are my personal opinions and should not be taken as financial advice. I am not qualified to be a financial advisor. Always consult with your financial advisor before investing in any of the companies mentioned on this blog.

 

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