Canada’s largest wireless operator Rogers Communications is reportedly backing a local investment firm on potential acquisitions of smaller rivals Wind Mobile and Mobilicity.
According to Canadian newspaper The Globe and Mail, the plan would enable…
Canada’s largest wireless operator Rogers Communications is reportedly backing a local investment firm on potential acquisitions of smaller rivals Wind Mobile and Mobilicity.
According to Canadian newspaper The Globe and Mail, the plan would enable Rogers to circumvent Canada’s strict regulations on industry mergers and discourage the US’ Verizon Communications from entering the local market.
One proposed deal would see Toronto-based Birch Hill Equity Partners acquire a controlling stake in Wind, in which Amsterdam-based VimpelCom has a 99.3% indirect stake.
Rogers would make a financial contribution and gain a network sharing agreement with Wind rather than an equity stake, according to the report, which cited five unnamed sources. This would enable Rogers to use the smaller player’s valuable spectrum to boost its own high-speed services.
Birch Hill is also eyeing a takeover of Mobilicity, with Rogers as a likely partner, the newspaper cited “multiple” unidentified sources as saying. The investment firm is reportedly leading the planned deals, which are still in the negotiation stage.
Rogers has declined to comment on the matter, while Birch Hill did not respond to a request for comment.
Verizon has made no secret of its plan to expand into the Canadian wireless market now restrictions upon foreign ownership have been relaxed. In late June, the telecoms giant reportedly offered to buy Wind for about C$700m and is said to have also held talks with Mobilicity.
Rumours that a Canadian deal could be on the cards have been fuelled by VimpelCom’s previous plans to divest Wind and by Mobilicity’s financial troubles.
The Canadian government recently blocked the proposed sale of Mobilicity to the nation’s third-largest mobile operator, Telus.
Rogers and Birch Hill’s planned deals would most likely run into regulatory hurdles as the government has said it does not want the nation’s three largest mobile operators to acquire spectrum set aside at the 2008 spectrum auction for new players such as Wind. However, it is also keen on operators improving their coverage in rural areas.
