It should come as no surprise to Canadians that WIND Mobile announced their intentions to go head-to-head with Mobilicity in the upcoming AWS-3 and 2500MHz spectrum auctions this spring. The Government has taken steps to set aside 60-percent of the AWS-3 spectrum for new entrants or the smaller carriers, such as WIND and Mobilicity, in their continuing efforts to increase wireless competition. A fact that has not fallen on deaf ears as WIND Mobile Founder and Chairman Anthony Lacavera said, "The Canadian government has taken positive steps toward ensuring that precious wireless spectrum is put to competitive use across Canada. Our participation in the upcoming AWS-3 and 2500MHz auctions reaffirms our long-standing commitment to build a competitive wireless industry in Canada."
Mobilicity, already under the watchful eye of the protective courts, announced yesterday that they were able to reach an agreement to enter into a second debtor-in-possession (DIP) for $65 million to secure their deposit for the bid. It was structured off of the original DIP financing agreement they entered into when it first filed for protection under the Companies' Creditors Arrangement Act.
This puts WIND Mobile and Mobilicity as the only bidders to qualify to bid for the new spectrum licenses in the Ontario, British Columbia and Alberta areas. Without Mobilicity's involvement, WIND Mobile could have sweep in and purchased all of the spectrum for the opening bid of $62.5 million. With both participating in the bidding process, whomever places the winning bid - sealed until the Government makes its announcement on March 6 - will get the AWS-3 spectrum.
For the second auction of 2500MHz spectrum, they Government has not set aside any for new entrants, however, there is a cap established by the Government on how much each carrier can hold and both Rogers and Bell have already exceeded that cap in some areas. This leaves TELUS poised as the main benefactor of that auction, although WIND Mobile has already announced they will bid for it as well - Mobilicity has already said it will not take part. Wind CEO Pietro Cordova said in a statement Thursday, "Participating in the upcoming spectrum auctions is another step in our journey to improve the quality of the services we deliver to our customers."
WIND Mobile has about 800,000 subscribers and would like to upgrade their network to LTE, but needs more spectrum to do that. They may be in a position after all of this to even go after and buyout Mobilicity and combine its 160,000 subscribers, possibly inching closer to the increased competition that the Canadian Government is striving to achieve.