US investment firm Providence Equity Partners is examining the possibility of acquiring a stake in Canadian operator Wind Mobile, people with knowledge of the matter told Bloomberg.
TelecomFinance understands that Providence is looking at the…
US investment firm Providence Equity Partners is examining the possibility of acquiring a stake in Canadian operator Wind Mobile, people with knowledge of the matter told Bloomberg.
TelecomFinance understands that Providence is looking at the opportunity, but it is only in the preliminary stages of assessing the potential target.
The sponsor’s interest follows the Canadian government’s surprise announcement that it will fast-track the auction of AWS-3 spectrum set to be held in March 2015.
The rules of the auction strongly favour smaller operators such as Wind because a 30 MHz block will be set aside, and only operators with less than 10% of national market share and 20% of regional market share will be eligible to bid for it.
The structure is designed to turn Wind and struggling Mobilicity into viable investments, and create an incentive for buyers that have been looking at the operators to invest.
The Canadian government has made it clear that the country’s three dominant operators – Bell Canada, Rogers Wireless and Telus – will not be allowed to acquire the smaller operators. Instead it has been attempting to nurture the creation of a fourth player.
Analysts have previously suggested that it would cost around C$600m to acquire both Wind and Mobilicity, and a similar amount to purchase the amount of spectrum it would need to go national.
Up until this point French Canadian quad-play operator Videotron has been seen as the most likely acquirer after it bought a swathe of 700 MHz spectrum earlier this year.
Private equity firms had not been tipped to be the consolidator due to the lack of a clear exit strategy from Canada’s highly-regulated telecoms market.
Providence has been one of the most active PE firms in telecoms over the last few years. In 2014 alone it has exited Ono after the Spanish cableco’s investors struck a US$10bn deal to sell the operator to Vodafone. It has also bought into Helios Towers, is rumoured to be interested in the privatisation of Telekom Slovenije, and is considering offloading its Brazilian towerco Grupo TorreSur.
