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If Verizon Communications Inc. is not certain it can reap a return on a foray into Canada’s wireless market, it might not bother heading north of the border.

Scotiabank telecom analyst Jeff Fan said he believes Verizon views the chance to consolidate one or more of Canada’s small new entrant mobile providers and purchase wireless spectrum in an upcoming auction as “opportunistic and not 100% strategic.”

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“Hence return on investment matters and acquiring spectrum at reasonable prices to support return on investment could be a challenge given Canadian incumbents’ strong interest to protect their positions,” Mr. Fan said in a research report Friday.

Verizon, as a new entrant to the market, would be permitted to bid on up to two of the four blocks of prime spectrum in the auction while Telus Corp., Rogers Communications Inc. and BCE Inc. would all be limited to one block.

“We continue to believe there is no guarantee that Verizon can secure spectrum (specifically two 700 MHz blocks in the upper C bands) in the upcoming auction at reasonable prices given the Canadian incumbents’ interest,” Mr. Fan said.