Wind Mobile considers buying cash-strapped Mobilicity
New entrant telecom firm is under bankruptcy protection after Telus bid blocked by Ottawa
The company that owns Wind Mobile is considering a potential bid for Mobilicity, a new entrant telecom firm that is currently under court protection from creditors.
Globalive Wireless Management Corp. is taking part in the court-monitored sale process of Mobilicity, which must be concluded by Dec. 9, according to Wind CEO Tony Lacavera.
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"Wind requires additional spectrum in order to advance our business plan for next generation wireless services and compete long-term on a level playing field with the big three," Lacavera said in an email.
"Globalive Wireless Management Corp. [operating as Wind Mobile] has entered the court-monitored Mobilicity sale process and we are assessing the value that the Mobilicity assets may have toward advancing our business plan."
Mobilicity filed for bankruptcy court protection in September after the Canadian government blocked a $380-million bid for the company by telecom giant Telus Corp.
The federal government has twice blocked Telus from buying Mobilicity, saying the sale would reduce competition in the wireless sector. It did allow Telus to buy Public Mobile, another struggling new entrant, last week.
Acquiring Mobilicity would add about 190,000 subscribers, mostly in southern Ontario, to Wind’s customer base.
Mobilicity also has $243.1-million of spectrum bought during the 2008 spectrum auction, but has been unable to make enough return to justify staying in business.
Wind, also considered a new entrant, has 640,000 subscribers in Ontario, Alberta and British Columbia and its parent Globalive is bidding on some of the new broadband spectrum the federal government is auctioning off this fall.
Wind’s financial picture also has been precarious, but it hopes to make the most of the federal government’s assertion that it wants more competition in the wireless sector.
Since the summer, Industry Minister James Moore has waged a very public campaign saying the big three telecom firms — Bell, Telus and Rogers — must improve their service and prices and make way for competition in the sector.
With files from the Canadian Press