Canada’s fourth largest operator Wind Mobile has withdrawn from the country’s 700 MHz auction, which starts today, because its parent VimpelCom decided not to provide it with funds to bid.
VimpelCom has said it is in discussions with fellow…
Canada’s fourth largest operator Wind Mobile has withdrawn from the country’s 700 MHz auction, which starts today, because its parent VimpelCom decided not to provide it with funds to bid.
VimpelCom has said it is in discussions with fellow shareholder and Wind CEO Anthony Lacavera as well as with the government “to craft a path forward to develop Wind Canada as a strong fourth player in Canada”.
In the statement, Russia-focused VimpelCom also said: “We hope to have an opportunity in the future to perhaps re-apply and bid on spectrum, should the government decide to re-open another 700 MHz spectrum bid process.”
Wind’s withdrawal comes as a blow to business ministry Industry Canada, which has been trying to promote competition in the mobile sector.
Last year VimpelCom tried to take over Wind by raising its stake to 99.3%. However in June, the group withdrew its application for Investment Canada Act approval for the acquisition, which governs foreign ownership in telecoms.
A week prior to VimpleCom’s decision, it was reported that the takeover was being delayed due to security concerns. Canadian officials were reportedly concerned about Wind’s network, built by China’s Huawei, being controlled by a partly Russian-owned company. VimpelCom, Wind and Huawei all disputed the gist of the report.
Orascom bankrolled Wind from when it first acquired spectrum in 2008, and VimpelCom continued to fund the operator after it took over Orascom in 2011. However, it was reported that VimpelCom had hired UBS to find a buyer for Wind after it consolidated the challenger.
It was not disclosed how much VimpelCom agreed to pay for the outstanding Wind shares, but Lacavera was set to receive cash for his stake. He holds an indirect 66.7% voting interest and 34.3% economic interest in Wind via AAL Corp. VimpelCom has previously said that it is looking for a “clean exit” from Canada.
In a tweet yesterday, Lacavera expressed his disappoint at Wind’s withdrawal from the auction: “It is business as usual at Wind – we do need more spectrum so I am not happy we had to withdraw from [the] 700 [MHz auction] but onwards and upwards for here!”
Wind’s withdrawal leaves 10 participants to battle it out for 700 MHz spectrum, down from an initial 15. Of that number only three – Bell Canada, Rogers Wireless and Telus – are likely to be bidding for licences on a nationwide level.
Canada’s government has aimed to ensure that at least four operators compete in every region of the country, but its policies to promote competition are yet to bear fruit.
