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Providence May Make an Offer for a Stake in Canadian Carrier Wind

July 30, 2014 - Written By Cory McNutt

Our source tells us that Providence Equity Partners is considering investing in another wireless company – Wind of Canada.  The Canadian Government has made it quite clear that they want FOUR large carriers in Canada to foster competition and consequently lower prices.  With the money from Providence, Wind would be able to purchase additional spectrum, which would lead to expansion and some real competition for Rogers, Bell (BCE) and Telus.

The Federal Government in Canada has done everything but stand on its head to help out the little wireless operators and make it tough on the Big Three, even when it comes to spectrum auctions, making it as favorable as possible for the smaller companies.  Their latest attempt was to announce a “surprise wireless spectrum auction” on March 2015 – they will reserve 60-percent of the spectrum for sale to the smaller companies that have less than 10-percent of the national market and less than 20-percent of market share among provincial subscribers.

Wind Mobile Chief Executive Officer Anthony Lacavera insists that they need more spectrum to compete with the Big Three – to the tune of about $460 million dollars, especially if they are to upgrade their network to LTE technology…this is where Providence could help out.  Wind Mobile is growing – from the 650,000 subscribers in December 2013 to 735,000 in May 2014 and owns network in parts of Ontario, Alberta and British Columbia and roaming agreements with Rogers in other areas.  Even with Wind Mobile’s 735,000 subscribers that only amounts to less than 3-percent of Canada’s wireless market…so they will definitely qualify for the March spectrum auction.

What will happen at Wind Mobile is up for grabs – there have been numerous potential investors.  In January 2013, Orascom was going to buy out Lacavera and take control of the company, but then backed out.  VimpelCom has withdrawn its funding for Wind and valued their investment at zero, but are now thinking of swapping its stake in Wind Mobile for a stake in a larger operator.  Providence, a Rhode Island investment company, was an investor in Calgary’s MetroNet Communications before it was acquired by AT&T Canada in 1999 and has always had some type of investment in Canada.  Hammering out a deal with Wind Mobile could be a real possibility.

Please hook up with us on our Google+ Page and let us know if you are in favor of the Canadian Government’s determination to have major carriers – will it really lead to lower prices and more competition…as always we would love to hear from you.