Wind Selling LTE Spectrum in Prairies to MTS, Sasktel; MTS Moves to Divest Allstream

Canada’s fourth largest cellular operator by subscribers Wind Mobile has won approval from the telecoms ministry Industry Canada to transfer its unused AWS (1700MHz/2100MHz) spectrum licences in the Prairie provinces of Manitoba and Saskatchewan to the two regions’ respective incumbent telcos Manitoba Telecom Services (MTS Allstream) and SaskTel, which will each add the frequencies to their existing 4G LTE bandwidth. SaskTel CEO Ron Styles said in a press release: ‘Our 4G LTE network in the nine major urban centres in Saskatchewan operates on the AWS-1 spectrum band and with these additional blocks we can deliver significantly more bandwidth and faster speeds.’ SaskTel’s communications director Michelle Englot added, however, that final terms including price had not yet been agreed, as the Regina-based telco remained in negotiations with Wind. MTS, on the other hand, released a statement confirming that it has agreed to purchase 15MHz of paired AWS-1 spectrum in Manitoba from Wind for CAD45 million (USD34.3 million), saying that the acquisition will ‘significantly increase the speed and customer experience on the MTS wireless network to the benefit of many Manitobans.’

Wind’s CEO Alek Krstajic stated that the company will channel the proceeds from the spectrum sales into network expansion and quality improvements including LTE services in Ontario, British Columbia and Alberta.

MTS added in its release that it will finance the CAD45 million spectrum payment to Wind using existing credit facilities which it plans to repay following its planned sale of its national long-distance and enterprise telecoms division Allstream. The Winnipeg Free Press notes that in MTS’ latest results for Q2 2015, the dramatic downsizing of the Toronto-based Allstream division drove free cash flow up 41% to CAD45.4 million, while the company said that management has shifted focus to manage the exit of Allstream ‘that will maximise value while promoting deal certainty.’ MTS has retained advisors and plans to formally approach prospective purchasers for Allstream in the second half of this year. MTS’ revenue for the second quarter was down 1.2% year-on-year to CAD398.3 million, EBITDA fell 14.5% to CAD121.9 million and net income dropped 47.5% to CAD10.4 million.

Thanks to TeleGeography for the article.


Feds Study Telus, Rogers Bids for Mobilicity; Founder Proposes Alternative MVNO Strategy

Canada’s two largest mobile operators by users, Rogers and Telus, have recently tabled takeover offers for financially struggling smaller cellco Mobilicity, although any potential deal is subject to federal government approval under strict wireless spectrum transfer rules aimed at preserving competition, the Financial Post reports. According to sources quoted by the paper, a group of creditors and directors of Mobilicity met over the weekend to assess offers from both national operators exceeding the previous CAD350 million (USD285 million) offer from Telus rejected last year by Industry Canada under the spectrum transfer rules designed to prevent nationwide incumbents gaining smaller competitors’ 3G/4G frequencies. Telus spokesperson Shawn Hall confirmed that the company remains interested in purchasing Mobilicity and put forth a proposed transaction to Industry Canada for review, while talks remain ongoing and confidential, with Rogers currently unwilling to comment. A key part of a potential deal would involve agreeing a free-of-cost transfer of Mobilicity’s AWS-1 frequencies to mid-tier cellco Wind Mobile post-purchase to circumvent the government’s competition-guarding policy. Telus confirmed that its latest proposal includes this free-transfer clause, and although this idea has previously been rejected by Industry Canada, there could be federal backing for a move bolstering Wind’s position following March’s AWS-3 spectrum auction in which Wind raised its profile against nationwide players Rogers, Telus and Bell by winning set-aside licences in Ontario, Alberta and British Columbia for minimal prices after Mobilicity failed to find the funding to participate. So far, the government is remaining opaque on the latest prospects for a deal, with Minister of Industry James Moore’s press secretary Jake Enwright saying on Sunday: ‘We’ve had a clear position on these types of transactions for some time. We’ll not approve spectrum transfer requests that decrease competition in the wireless sector.’

Meanwhile, a separate proposal has been aired by Mobilicity founder John Bitove – backed by his holding company Obelysk – and a group of Mobilicity employees who have made an offer to Industry Canada to become a mobile virtual network operator (MVNO). Mobilicity itself is not involved in the MVNO bid.

Mobilicity has around 157,000 remaining subscribers and a network of around 450 3G cell sites in Toronto, Vancouver, Edmonton, Calgary and Ottawa, operating under court-sanctioned creditor protection since September 2013 as it continues to seek an optimal exit strategy for creditors and investors.

Thanks to TeleGeography for the article. 

VoIP Players Primus, Yak Expanding, Upgrading Services

Primus Telecommunications Canada is significantly expanding its business VoIP telephony footprint with availability in new markets of all sizes across the country, it announced in a press release. As a result, Primus has quadrupled its footprint with significant increases in regions and provinces such as Atlantic Canada, Quebec and Saskatchewan in an effort to reach more than 80% of businesses across the country with its VoIP offerings. Primus – the first telco in Canada to introduce VoIP services in 2004 – adds that as a result of the expansion, it will offer fixed number portability in every province for business customers. Primus offers a range of VoIP options for businesses including SIP Trunking and Hosted PBX (a cloud-based VoIP phone system which allows employees to work in the office, at home, or on mobile devices). Primus bills itself as the largest independent telecommunications service provider in Canada, offering consumer and business telecoms services nationwide including Home Phone, Internet, Long Distance, VoIP, Enterprise IP Voice Solutions, Hosted Phone Systems (Hosted PBX), Dedicated Data Access and IP connectivity solutions.

Another long-established alternative Canadian telecoms provider, Yak Communications (sister of cellco Wind Mobile), issued a press release last week announcing the launch of its upgraded ‘Yak Clear Voice’ service, which it claims provides Yak home phone users with ‘crystal-clear voice calls using enhanced noise reduction technologies’. CEO of Yak’s parent group Globalive, Anthony Lacavera, gave this statement on the latest technology launch: ‘Having a digital home phone or VoIP product in Canada, which has always beaten traditional home phone on price, and is now competing at the highest level with regard to voice quality, is sure to be a game-changer. In the coming months, this technology will also be integrated with Yak’s Mobile Calling App. I’m extremely proud of the progress we’ve made.’ Yak operates nationally, offering Internet, Home Phone, Mobile, Travel Card and Landline Long Distance services, with pricing that it claims ‘undercuts telecom competitors by margins up to 80%’. The firm has provided long-distance call services since the early 1990s.

Thanks to TeleGeography for the article.

Ten Applicants for AWS-3 Auction; Eleven Line up for 2600MHz

Telecoms ministry Industry Canada has published the full list of ten applicants for the upcoming auction of spectrum licences for Advanced Wireless Services (AWS-3) in the bands 1755-1780MHz and 2155-2180MHz, namely: Rogers Communications, Telus Communications, Bell Mobility, Wind Mobile, Videotron, Data & Audio-Visual Enterprises Wireless (Mobilicity), Bragg Communications (Eastlink), MTS, Saskatchewan Telecommunications (SaskTel) and TBayTel. Publication of the list of qualified bidders is set for 13 February, with the sealed bid deadline on 3 March. Announcement of provisional AWS-3 licence winners will take place on 6 March.

Simultaneously, Industry Canada published the official list of eleven applicants for the auction of Broadband Radio Service (BRS) spectrum licences in the 2500-2690MHz band, namely: Rogers Communications, Telus Communications, Bell Mobility, Wind Mobile, Videotron, Bragg Communications (Eastlink), MTS, TBayTel, Xplornet Communications, Corridor Communications (CCI Wireless) and SSi Micro (affiliated to companies including Northern Broadband, Northern Space Link, Broadsky Communications, SSi Connexions and others). The final list of qualified 2600MHz bidders will be published on 13 February, ahead of an auction which opens on 14 April. Provisional 2600MHz licence winners will be announced within five days following cessation of bidding.

Thanks to TeleGeography for the article. 

Wind Gets Third National Roaming Partner

Canada’s fourth largest cellular operator by subscribers Wind Mobile has added a third domestic network roaming partner, Telus, to add to its existing partners Rogers and Bell, raising its combined on-net and roaming coverage footprint to 97% of the population, reports MobileSyrup. The company indicated that its roaming (‘WIND Away’) network coverage has expanded by 14% across the country and 40% in Telus’ home province of British Columbia via the deal. Earlier this year Canada’s telecoms regulator the CRTC banned exclusivity clauses in domestic mobile roaming agreements – and specifically chastised Rogers for discriminatory practices regarding smaller market players – whilst the federal government pushed through a bill preventing Canadian carriers from charging their peers more for wholesale mobile roaming services than they charge their own customers for mobile voice, data and text services. This regulation/legislation prompted Wind to add Bell as a second roaming partner while renegotiating its call, messaging and data roaming rates; MobileSyrup adds that Wind’s data roaming rates dropped to the same level Rogers charges its pre-paid customers.

Thanks to TeleGeography for the article.

Government Approves Wind Sale

The Canadian government yesterday approved the previously announced sale of Globalive Wireless (Wind Mobile) to an investor group that includes the company’s chairman, after deciding that the transaction will bolster competition in the cellular market, the Wall Street Journal reports. Federal approval came with conditions including a pledge by Wind Mobile’s new ownership to significantly invest in new spectrum and expansion of network infrastructure across Canada. It was announced in September that Canada’s fourth-largest cellular operator by subscribers was being sold by Russian-backed Vimpelcom’s Egypt-based subsidiary Global Telecom Holding (GTH) to Toronto-based Globalive Capital, controlled by Wind’s chairman Anthony Lacavera, with the transaction partly financed by an investor group led by Canadian hedge fund West Face Capital, going under the consortium name AAL Acquisitions Corp. Other members of the US/Canadian buying consortium are Tennenbaum Capital Partners, LG Capital Investors, Serruya Private Equity and Novus Wireless Communications. Including debt, the value of the deal was reported as roughly CAD300 million (USD264 million), while Vimpelcom/GTH announced the majority equity stake was bought for approximately CAD135 million. The telecoms ministry Industry Canada has also approved the required spectrum licence transfer. Additionally, Anthony Lacavera has stepped down as CEO of Wind Mobile, but remains as chairman, while Pietro Cordova is promoted to the CEO post.

Thanks to TeleGeography for the article. 

Vimpelcom Exits Wind Mobile: Sells Out To Consortium Of Canadian Owners/Investment Funds

Russian-backed telecoms group Vimpelcom and its Egyptian-based subsidiary Global Telecom Holding (GTH) jointly announced today that they have agreed to sell all of their debt and equity interest in the Globalive group of companies in Canada, including Globalive Wireless Management Corp (Wind Canada), the operator of the Wind Mobile cellular network. Canada’s Globalive Capital (formerly AAL Holdings), the controlling shareholder of Wind Canada, and a group of investment funds are acquiring the entire Vimpelcom/GTH share for approximately CAD135 million (USD121.9 million), with the proceeds going to Vimpelcom in repayment of part of the debt owed to it, the group’s press release disclosed. At the same time, GTH will be released from all of its obligations under a related Shareholders Agreement and certain debt obligations of Wind Canada. The transaction is expected to close ‘shortly’, the release added. Under the deal, Globalive’s chairman and CEO Anthony Lacavera will continue to lead Wind Mobile, in partnership with investors led by Canadian hedge fund West Face Capital and US-based Tennenbaum Capital, the Globe & Mail reported earlier.

Vimpelcom, which is US-listed and headquartered in the Netherlands but remains majority Russian-owned, entered Wind Mobile’s ownership through its acquisition of Egypt’s Orascom Telecom Holding (later renamed GTH) in 2011. Globalive Capital currently controls a 66.7% voting interest and 34.3% economic stake in Wind Mobile, whilst GTH controls 65.08% of equity and 32.02% of voting shares in the cellco. The Canadian government blocked GTH from increasing its voting share to a majority interest in 2013 for undisclosed reasons, causing Vimpelcom/GTH to withhold additional investment in the venture – meaning that it boycotted Canada’s 700MHz 4G mobile licence auction. It is hoped that the takeover by the Canadian-US investment consortium should enable Wind to participate in further upcoming spectrum auctions.

Thanks to TeleGeography for the article.