Providence Equity said exploring bid for stake in Wind Mobile

Providence Equity Partners Inc. is considering acquiring a stake in Canadian wireless provider Wind Mobile, people with knowledge of the matter said, as Canada continues its effort to create a fourth national carrier. More

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telecommunications

Providence Equity said exploring bid for stake in Wind Mobile

Posted 7/30/14

TORONTO – Providence Equity Partners Inc. is considering acquiring a stake in Canadian wireless provider Wind Mobile, people with knowledge of the matter said, as Canada continues its effort to create a fourth national carrier.

The people asked not to be identified because the information is private.

Providence Equity, with a track record of investing in wireless communications, could provide Wind Mobile with the backing needed to acquire spectrum so it can expand. The Canadian government has been pushing aggressively for another national provider, saying the best way to reduce wireless rates and improve service is through added competition with Rogers Communications Inc., BCE Inc. and Telus Corp.

The federal government’s latest effort on that front was to announce a surprise wireless spectrum auction that will be held in March 2015, in which 60 percent of the new block of spectrum would be reserved for smaller players holding less than 10 percent of the national market and less than 20 percent of market share among provincial wireless subscribers.

Wind Mobile CEO Anthony Lacavera said last month the company needs to acquire more mobile-phone spectrum to take on Canada’s major wireless carriers. He has also said Wind needs a C$400 million to C$500 million ($461 million) investment to upgrade its network to long-term evolution technology, or LTE.

Market share

Wind Mobile had 735,000 subscribers at the end of May. While that’s up from 650,000 in December, it falls short of the company’s target for 1.5 million in its first three years after beginning operations in December 2009. It has its own network in parts of Ontario, Alberta and British Columbia and network- sharing partnerships with Rogers in other areas.

Wind Mobile’s customers account for less than 3 percent of Canada’s wireless market. About 90 percent of Canadian consumers are covered by Rogers, BCE and Telus.

Lacavera’s AAL Corp. controls 35 percent of the equity and two-thirds of the voting rights to Globalive Wireless Management Corp., which operates in Canada under the Wind Mobile brand. The remaining equity and voting rights are controlled by Cairo-based Global Telecom Holding SAE, formerly known as Orascom Telecom Holding SAE. VimpelCom Ltd. has a controlling interest in Global Telecom Holding.

VimpelCom stake

In January 2013, Orascom entered into an agreement to buy out Lacavera and take control of the company. It eventually withdrew its bid in June of that year, with the the Globe and Mail reporting then that federal officials were prepared to block the deal for unspecified national security concerns. VimpelCom has since withdrawn funding for Wind and wrote down Wind’s value to zero.

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