TORONTO (Reuters) - Mexican tycoon Carlos Slim may be talking with Canadian telecoms about a deal to use their networks to give him a toehold in a market in which foreign participation is tightly restricted, an analyst said on Thursday.
Slim’s company, America Movil, which boasts 225 million wireless customers across the Americas, would likely rent space on an incumbent network rather than seek to build or buy his own, wrote UBS analyst Phillip Huang. Canada’s vastness and its relatively small population would likely dictate that strategy, he said in a note to clients, without citing evidence.
A second analyst, Dvai Ghose at Canaccord Genuity, said Slim, the world’s richest man, would find it difficult to buy assets in Canada’s telecom sector because of the country’s legal restrictions on foreign involvement in the sector.
By not buying or building its own infrastructure America Movil can avoid those restrictions, Huang said.
A deal would give one of Canada’s established operators -- BCE Inc, Rogers Communications or Telus -- a higher return on its assets and help fund the rollout of new high-speed networks, he said.
Slim already has experience with such arrangements. America Movil’s Tracfone unit rents airwaves from Verizon for its prepaid service in the United States.
“We expect (America Movil) to push for aggressive wholesale rates given its financial clout, global scale and capacity to deliver the handset supply,” Huang said in a note to clients.
Reporting by Alastair Sharp; editing by Peter Galloway
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