Is Wind Mobile About to Buy Mobilicity?
The day after the U.S. blocked AT&T's bid to buy T-Mobile for $39 billion, a smaller-scale Canadian deal appears to be in the works. According to Bloomberg, which cites "a person familiar with the discussions," Globalive Communications is in talks to buy Mobilicity, one of Canada's startup discount wireless carriers. Globalive owns Wind Mobile, another newcomer.
Wind and Mobilicity use compatible wireless frequencies, making the latter an ideal target for the former, which is larger and boasts superior resources (such as financial backing from Amsterdam's VimpelCom). The acquisition would boost Wind's subscriber base by over 50%.
Bloomberg's report suggests the deal could happen in the first quarter of 2012. Mobilicity recently lost founder and CEO Dave Dobbin, who resigned in November. The company's ultra-aggressive pricing and promotions tactics have been welcomed by consumers but critics question the sustainability.
The wireless startup carriers (including Public Mobile as well) have been fighting an uphill a battle in attempting to erode the dominant iron grip of the Big Three—Rogers, Telus, and Bell, who collectively control well over 90% of the country's mobile phone market. In 2012, a new wireless spectrum auction will be held by the government, which will be a boon for either the startups or the oligopoly, depending on the rules the government lays out.
