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Canada's Wind Attracts PE Investor
Source: totaltele.com
Source Date: Monday, July 28, 2014
Focus: Citizen Engagement
Country: Canada
Created: Aug 05, 2014

Providence Equity Partners is reportedly considering acquiring a stake in struggling Canadian telco Wind Mobile.

The private equity firm could provide Wind with the financial backing it needs to acquire new spectrum and establish itself as a credible competitor in the Canadian mobile market, Bloomberg reported on Tuesday, citing unnamed sources.

Like fellow market minnow Mobilicity, Wind has thus far failed to gain a significant foothold in Canada.

It entered the market through the country's AWS spectrum auction in 2008 and launched services in late 2009, but since then has signed up just 700,000 customers, according to an announcement earlier this year. According to the Canadian Wireless Telecommunications Association (CWTA), Wind had a share of 2.5% of Canada's 27.7 million mobile customers as of the end of Q1. The big three – Bell Canada, Rogers and Telus – together had more than 25 million customers at the same date, or 90% of the market.

The Canadian government has been working to foster the introduction of a stronger fourth player into the mobile market for some time.

Ottawa has consistently blocked the takeover of Mobilicity by Telus, since it has determined that the big three should not be permitted to bulk up further. Mobilicity is now operating under creditor protection from the courts.

There have been reports that the government would be happy to see a merger between Mobilicity and Wind Mobile, but neither company has given any indication that such a move is likely.

Talk last year of a foreign operator like Verizon Wireless entering the market came to nothing, as the country's 700-MHz spectrum auction earlier this year failed to attract interest from overseas. Videotron, a subsidiary of media group Quebecor, won frequencies in that auction and has indicated that it plans to expand its mobile presence outside of its home market of Quebec.

Wind Mobile pulled out of January's auction at the 11th hour after parent company Vimpelcom declined to provide funding for it to acquire more spectrum.

And the company has been vocal about its need for spectrum. Earlier this month Industry Canada announced that it will reserve 30 MHz of the 50 MHz of AWS-3 spectrum up for grabs in next year's auction for newcomers, including those already operating, like Wind and Mobilicity.
Wind Mobile CEO Tony Lacavera took to Twitter to applaud the move.

"Govt action today on spectrum is great for competition, ensures we will have access to the spectrum we need for LTE," he said.

Wind Mobile is the operating brand of Globalive Wireless. According to Bloomberg, Lacavera's AAL Corp controls 35% of Globalive and two thirds of its voting rights. Egypt's Global Telecom Holding, part of the Vimpelcom group, holds the remaining 65%.

(By Mary Lennighan)
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