Small cellphone player Wind Mobile will be among bidders for valuable wireless spectrum in Canada being put up for auction in January as it moves to take on big carriers Rogers, Telus and Bell, chief executive Anthony Lacavera said Monday.
Lacavera owns a 35 per cent stake in Wind Mobile, the company he founded and launched in December 2009 after participating in the previous spectrum auction five years ago.
"Obviously, there has been a very rapid evolution of smartphones," he said from Toronto. "We're now in a position where we need a lot more spectrum to service demand."
Lacavera said he couldn't discuss funding for the company's bid because the rules of the auction forbid the disclosure of that information.
Companies that want to bid in the government auction for wireless spectrum early next year had to register and pay a deposit by noon Tuesday. Telus, one of Canada's big three players, along with Rogers and Bell, has confirmed it has entered a bid.
America's AT&T, Norway's Telenor and U.K.'s Vodafone have been rumoured to be interested, now that U.S. giant Verizon has announced it's no longer considering an expansion north.
Wind advocating more competition
'We're now in a position where we need a lot more spectrum to service demand.' - Anthony Lacavera, Wind Mobile
Lacavera, an entrepreneur who first entered the wireless business in 2008 with his Globalive Wireless Management Corp., the holding company that operates Wind in Canada, says he aims to be one of the biggest players in the wireless market.
"The big three in Canada are operating with the biggest operating wireless operating margins in the world ," he told CBC News. "They have some of the highest pricing and some of the highest margins in the world and some of the lowest customer satisfaction results.
"So, I think their franchises are at risk if a well-heeled competitor comes in, like Orascom was threatening in 2008 in the partnership with Globalive and myself. We were that threat at that time."
Orascom Telecom Holding is an Egyptian company whose investment in Wind helped it bid for spectrum in 2008, but Wind has had a rough few years building a viable network.
In June, Orascom, which is majority owned by VimpelCom Ltd. and owns a 65 per cent share of Wind, announced it would not be buying out Lacavera's stake in Wind as the two companies had suggested it would earlier this year.
Lacavera said at the time he would try to convince Orascom to go through with the deal, but the Russian telecoms investment firm Altima that owns the Amsterdam-based VimpleCom has since put the Orascom stake up for sale.
Auction could be very profitable for Ottawa
Wind Mobile is now the fourth major carrier in Ontario, British Columbia and Alberta and has more than 650,000 cellphone customers nationwide, Lacavera told CBC News this week.
"My goal is to re-cut the Canadian wireless system to be competitive with global pricing, competitive with global customer satisfaction. That's my goal and, you know, I'm going to keep going at it," he said.
The company needs more radio wave spectrum to build out a faster, more advanced network that can run the latest devices, such as Apple's new iPhone.
The auction of 700 megahertz spectrum, which analysts have called "beachfront property" because of its value, could raise a lot of cash for the federal government. The 2008 auction raised about $4.3 billion.
These radio waves have the ability to allow cellphone signals to reach into elevators, deep into underground parking lots, traffic tunnels and basements where calls are often dropped.
The signal can also travel greater distances and, in rural Canada, will require fewer cellphone towers to provide coverage. It will also will help meet consumers' growing smartphone and tablet use.
Wind Mobile is the first new player to enter the auction. It's not yet clear if financially struggling Mobilicity will bid while Public Mobile also hasn't declared its intentions yet.
Rogers (TSX:RCI.B), Telus (TSX:T) and Bell (TSX:BCE) have about 25 million customers between them and dominate the wireless market in Canada.
Industry Canada says it won't publish a list of those who have put down a five per cent, refundable deposit for the auction until Sept. 23.