Wind Considers Bid for Mobilicity Assets to Face ‘Big Three’

Wind Mobile, one of Canada’s newer mobile-phone carriers, is assessing whether to bid for assets of smaller rival Mobilicity to beef up against established operators BCE Inc., Telus Corp. and Rogers Communications Inc.

Wind Mobile, the brand name of Globalive Wireless Management Corp., has entered a court-monitored sale process for Mobilicity and is assessing the value of its competitor’s assets, Chief Executive Officer Tony Lacavera said today.

Wind is looking to clinch a deal for struggling Mobilicity where Vancouver-based Telus has failed. The larger carrier’s C$380 million ($356 million) agreement in May to buy Mobilicity was blocked by the Canadian government, which didn’t want airwave licenses it set aside for new competitors to end up in the hands of the large incumbents.

Canadian carriers including Telus and Toronto-based Wind are looking to snap up more radio spectrum, which helps accommodate data-hungry smartphone and tablet users. Mobilicity said in September it had been granted court protection from creditors.

“Wind certainly needs more spectrum to compete long-term; we want to roll out LTE,” Lacavera said in a telephone interview, referring to faster long-term evolution networks. “Mobilicity has spectrum.”

Wind, which began operating in December 2009, has about 650,000 subscribers, less than half its three-year goal of 1.5 million, Lacavera said.

“We’re behind our original targets, although we are catching up rapidly,” Lacavera said.

Legal Lag

Part of the lag was due to legal actions from Telus and other carriers, who challenged Wind’s right to operate because it was founded with backing from a foreign investor, Egyptian billionaire Naguib Sawiris, Lacavera said. Canadian courts cleared Wind’s right to operate in 2011.

Wind is also moving its focus to contract customers instead of users who pay up front and get cut off once they exhaust their balance, said Lacavera.

“It’s become clear that the original prepaid business plan was not going to work,” he said. Now, about 55 percent of Wind’s customer base is on contracts, including 60 to 70 percent of new customers, Lacavera said.

Potential buyers of Mobilicity’s assets must submit bids by Dec. 9, the company said on its website. Lacavera said he’s keen to analyze the company’s assets.

“We’re looking forward to seeing where Mobilicity is at. Obviously there’s a lot of speculation out there about how many subscribers they have,” he said. “Nobody really knows.”

(Updates with comments from CEO in fifth paragraph.)
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