Greater foreign investment in Canada's telecom sector strengthens the case for BCE Inc. and Telus Corp. to merge, says Jeffrey Fan, Scotia Capital Markets analyst.
"This could happen earlier than envisioned," Mr. Fan said in a note to clients. "We believe BELUS would pose a threat to cables and we think cable
consolidation (Rogers, Shaw, and Cogeco) should be strongly considered."
Wednesday's throne speech said it would allow more access to foreign investment in Canada's telecom space in order to improve competitiveness. Telecom stocks fell following the news, but have since rebounded.
Mr. Fan said that wireless new entrants like Wind Mobile, Public Mobile and Mobilicity will benefit most from greater access to foreign capital as they build out their networks.
From an investment perspective, he said potential acquisition targets including Telus, Manitoba Telecom Services Inc., Cogeco Cable Inc. and Shaw Communications Inc. stand to gain most.