Québecor said that it has held meetings with several potential partners to gauge their interest in partnering should it decide to consolidate smaller operators in Canada’s mobile market.
However, whether Québecor’s telco, Vidéotron, would pursue…
Québecor said that it has held meetings with several potential partners to gauge their interest in partnering should it decide to consolidate smaller operators in Canada’s mobile market.
However, whether Québecor’s telco, Vidéotron, would pursue this strategy depends on the government reforming roaming regulations to make it affordable for the operator to use its larger rivals networks to gain nationwide coverage.
Canada’s telecoms regulator the CRTC is currently reviewing roaming rules and will make a decision in the coming months.
There are two obvious consolidation targets, Wind Mobile and Mobilicity, and both are up for sale.
VimpelCom, which owns Wind, is now willing to accept an offer of C$300m for its Canadian operator including debt, The Globe and Mail reported citing people with knowledge of the matter.
Private equity firm Blackstone has been considering investing in Wind, the report said.
Providence Equity Partners is also examining the possibility of acquiring a stake in Wind, TelecomFinance understands.
The sponsor is looking at the opportunity, but it is only in the preliminary stages of assessing the potential target, people familiar with the matter said.
The 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 considering investing in the operators.
Analysts have previously been sceptical about the possibility of private equity firms consolidating the smaller operators due to the lack of a clear exit strategy from Canada’s highly-regulated telecoms market.
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.