WIND Mobile has roughly half a million active users throughout Canada, and is rolling out its 3G network to smaller regions like Kitchener, ON and Richmond, BC. These days if you take public transit to work you’re likely to see evidence of Wind’s new customer-acquisition strategy. Part-owned by Orascom, a company whose Wind brand has nearly 200 million customers, the Canadian startup is attempting to make its experience and maturity more evident among millions of skeptics. Wind, it’s saying, may be a new brand in Canada (it was launched in 2009) but it’s one of the most trusted mobile names around the world.
To further that argument, Egypt’s Orascom, which merged with Holland-based VimpelCom earlier this year, plans to seek majority shareholder status of the Wind Mobile brand in Canada. As the Canadian government eases foreign ownership rules for those telecom companies with less than 10% of the overall market share, Orascom is seeking to take a 65% ownership stake in Wind Canada in order to exert more control over the carrier’s future.
Speculation has run rampant in recent months that Wind and Mobilicity are on the road to an inevitable merger, necessitated by the shortage of spectrum both companies need to build a robust national LTE network, in addition to the rampant costs associated with tower installation and maintenance. The merger would help both companies better compete against the incumbents and make more future foreign capital investments more likely.
Orascom’s majority share of the company, which would come by the end of 2012 or early 2013 as long as Canadian regulators approve the shareholder deal, would also forgive some $450 million in outstanding interest from the initial investment, and would see Globalive, current majority shareholder in Wind, change its name to that of the carrier. The former Globalive entity would still maintain a minority share in Wind Mobile Canada, and would allow CEO Anthony Lacavera to continue acting as head of Globalive’s holding company.
If and when this deal goes through, Wind will be in a much better position to obtain spectrum in the 700Mhz auction, which is expected to happen some time in mid-2013. Whether the merger with Mobilicity happens or not, Wind’s continued existence in Canada is assured. Which is more than we could have said a year ago.
Via: The Globe and Mail