Wind Mobile secures $500 million in funding… with strings attached
Discount wireless carrier startup Wind Mobile, owned by Globalive Holdings, has secured a whopping $500 million-plus in funding.
The massive amount of financing is solely for obtaining new airwave licences from the government's spectrum auction next year. Not only does the funding carry a very specific use, but it's also contigent on federal officials deciding to allocate a portion of the airwaves exclusively for new entrants—a decision that has not yet been made.
The money comes primarily from VimpelCom, which acquired Orascom Telecom earlier this year. Orascom was a major funder of Wind Mobile early on.
Quoth the Financial Post:
“Provided the conditions are right, [Wind] is prepared to participate and participate substantially,” Tony Lacavera, Globalive’s chairman and CEO. With a subscriber base approaching 400,000 customers, Wind is the largest of four new entrants to Canada’s $18-billion wireless market, rolling out services in cities across the country since launching in Toronto in December 2009.
This will only come together if Industry Canada sets aside some spectrum for the newbies. This is what occurred during the last auction, which held the express purpose of bringing in startups to expand competition in what consumers complained was an oligopoly.
Now the Big Three are arguing that the newbies aren't so new anymore and the auction should be wide open. The startups, meanwhile, insist that they do not have the financial resources to outbid the incumbent telcos in an openly structured auction.
Industry Canada is expected to finalize its decision in late October or early November.
700 Mhz spectrum is rising in value. It is anticipated that the Canadian operators will pay a collective $4 billion for the new spectrum, nearly as much as three years ago in the auction where it sold almost double the amount.
