Mobilicity Raises $215 Million In Debt Financing

by Gaurav Kheterpal on May 2, 2011

Mobilicity announced Friday that it has raised $215 million in new capital through a debt offering. The carrier says the latest round of financing will allow it to “compete with established carriers ahead of Canadian spectrum auctions due next year.”

Mobilicity launched its mobile network in Calgary last week with unlimited talk, text and data plans to offer a better alternative to Bell Mobility, Rogers Wireless and Telus Mobility. It also added two new smartphones – Nokia E73 and Samsung G-Touch to its existing portfolio.

Mobilicity says the latest round of financing will help “enhance its leadership position as Canada’s rising new wireless carrier.”

The financing was led by National Bank Financial and GMP Securities, which also organized a $75 million facility in late 2009, and involved 10 new investors. Mobilicity raised $125 million in 2009 through ING Bank and paid $243 million to buy spectrum in 2008. Mobilicity says reinvestments from the original group of investors are a testament to the carrier’s sound business plan.

Mobilicity currently operates in Toronto, Ottawa, Vancouver, Edmonton and Calgary. The carrier says it will use the fresh round of funding to strengthen its position in existing markets and it has no immediate plans to expand beyond these five major cities. Mobilicity has been able to attract more than 100,000 subscribers since its launch – that’s no mean achievement considering it launched one year ago in Toronto. Mobilicity claims its flat-rated, unlimited plans are the best in the country and it doesn’t handcuff customers to expensive extra charges and surprises on their bills.

Despite a recent report which suggests that the Big Three together control 95 percent of the wireless market in Canada, Mobilicity’s chief executive, Dave Dobbin, isn’t a worried man. He believes Mobilicity’s network is as good as any incumbent network in Canada. He believes Mobilicity did well to scale up its user base last year and said that signups were tracking at a similar pace this year.

Dobbin said he was eagerly looking forward to the next spectrum auction to further strengthen its position in Canada’s wireless sector. Dobbin declined to comment on whether the carrier would use funds from its latest round of financing to bid for spectrum.

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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