Wind-Mobile-Inside-Store-caption-2-e1370379135120

Wind Mobile is Written Down to a Value of Zero by its Parent Company VimpelCom

March 6, 2014 - Written By Cory McNutt

Wind Mobile’s future looks cloudier every day, as their parent company, VimpelCom,  basically valued them as zero worth, when they did a writedown of their Canadian assets of $768 million.  The Amsterdam-based telecom’s overall net loss for the fourth quarter of 2013 stood at $2.66 billion versus a year earlier net profit of $195 million.  They said that this ‘accounting move’ was necessary and they:

“fully impaired” its Canadian assets because of “challenges” it continues to face here.  It also stressed those same issues “resulted in the strategic decision to withdraw from the 700 MHz spectrum auction and the reassessment of the prospects for continuing operations in the country.”

Last summer, VimpelCom withdrew its application to take full control of Wind Mobile because of Ottawa’s planned to reject the offer on the grounds of national security.  Because of those conflicts, Wind was forced out of the January spectrum auction because VimpelCom refused to fund the purchase. This latest move has customers wondering what will happen next to their carrier.  Wind Mobile CEO Anthony Lacavera said in an e-mailed statement:

“It is business as usual at Wind and this accounting decision has no impact on our operations.  With an ever-improving network and an established market presence now in our fifth year of operations, I am more confident than ever that Canadians will enjoy the benefits of our market-leading value proposition and the true competition that Wind brings to the market long-term. Wind is here to stay.”

In updating investors, however, VimpelCom painted a much rosier picture of Wind Mobile – they saw a dramatic increase of 14-percent over last year with a total of 676,209 current subscribers.  Mr. Lacavera added:

“The government has made significant moves over the past 12 months to advance the competition policy, and we look forward to the implementation of the recent roaming decision which will ensure Canadians will finally have roaming choices and prices that are globally competitive.  We do need more spectrum to roll out LTE [long-term evolution] services long-term, and we look forward to discussing potential joint opportunities with spectrum owners in our current operating markets.”

The “implementation of their recent roaming agreement” is one that we reported on at the end of January, and will allow Canadians to have a new, low-cost, unlimited roaming capabilities in the U.S. for only C$15 a month.  It is an add-on and can be done for a month at a time, and cancelled anytime…much less than its rival carriers. WIND Mobile operates in Toronto, Calgary, Ottawa, Edmonton and Vancouver.