Wind Mobile–Mobilicity Merger Could Create a Fourth National Carrier, Lacavera Says

by Istvan Fekete on June 6, 2013

Both Telus and Mobilicity had high hopes for the application filed by the incumbents for the transfer of wireless spectrum: it would have meant $380 million for the wireless startup and another 250,000 subscribers for Canada’s No. 2 wireless player.

Industry Minister Christian Paradis, however, decided to stick with the government’s plans to have four wireless players in each province in the wireless market. In other words, the Telus–Mobilicity deal was scrapped by Paradis, despite obtaining the shareholder’s vote and court approval.

After initial negative reaction from the participating parties, Wind Mobile’s Anthony Lacavera has voiced his interest in merging Mobilicity with the Canada’s biggest wireless startup.

““We are certainly interested in re-opening the discussion with Mobilicity,” said Anthony Lacavera, Wind’s chairman and chief executive officer at a telecom conference in Toronto.

A Wind Mobile–Mobilicity merger has been the subject of discussions for a while now, but a merger with Telus would have brought better benefits for the wireless startup. However, with the Industry Minister’s reaction making it clear that Ottawa is after creating a competitive wireless market — he is ready to use every means he has at his disposal — a merger between wireless startups could make sense.

From the perspective of the industry landscape, it would rearrange the playing field by creating one strong competitor to fight against the incumbents. Bell, Rogers and Telus have more than 7 million subscribers each, while Wind Mobile has 600,000 and Mobilicity has 250,000. A merger between the two startups would increase the number of wireless subscribers to almost a million.

Now, if we consider that Public Mobile is also for sale, which according to the latest public numbers it has 199,000 subscribers, a merger between the wireless startups could make Ottawa’s dream come true and bring the much desired fruit of its long years of effort to create real wireless competition.

There is one catch, however: VimpelCom has also put Wind Mobile on sale. This could yet be an opportunity to strengthen its position on Canadian soil and, as Lacavera said, the Industry Minister’s decision gives the Dutch company and Wind CEO a solid policy foundation on which to build a business plan.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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