Wind seeks LTE spectrum from Shaw, Quebecor

TORONTO — Wind Mobile CEO Anthony Lacavera said Tuesday that his company needs access to LTE spectrum, perhaps from unused space held by Quebecor Inc. or Shaw Communications Inc., if his company is to continue to be a viable alternative to the incumbent wireless carriers. Lacavera said in an interview from the sidelines of the Canadian Telecom Summit in Toronto that LTE would cut network costs for Wind and offer its customers faster data services. He said the rollout of LTE across the world over the next few years means his company has little choice but to adopt and invest in the technology, if only to provide customers with the latest mobile devices. “Handset manufacturers are going to reduce or stop the manufacture of 3G handsets,” he said. “It becomes a handset-ecosystem issue for us. At some point, you have to be operating LTE.” Quebecor's Videotron, Shaw and struggling new-entrant carrier Mobilicity all have unused spectrum that Lacavera said his company could use to expand its wireless coverage and offer LTE. Wind could also pick up spectrum in the upcoming AWS-3 and 2500 MHz spectrum auctions, he said. What is important, Lacavera said, is that his company can purchase the spectrum at a “viable” cost, without the “incumbent economics” that forced Telus Corp., Rogers Communications Inc. and BCE Inc., to shell out billions of dollars in the 700 MHz spectrum auction this year. “Bell, Telus and Rogers can always pay more than a new entrant because they're defending an existing share and they have huge margins to finance that defence with,” he said. “If you have a competition agenda, and you've given the incumbents a head start for 25 years, I think you need to level the playing field a little bit. We're not asking for any handouts; we're asking about rational market value.” In January, Wind announced it was withdrawing from 700 MHz spectrum auction two days before it was to begin because of a failure to raise the necessary funding. Lacavera said the potential that some of the unused spectrum could be bought by the incumbent carriers has kept the price artificially high. “Videotron and Shaw spectrum are sources, but they're not viable sources unless those parties are willing to recognize that they are not going to be able to sell it to Rogers,” he said. The federal government has appeared steadfast in its resolve not to allow Mobilicity's spectrum to be acquired by Telus. If Wind is able to pick up spectrum in the upcoming auctions or from other sources, Lacavera said, there will be renewed pressure on spectrum holders to sell. “They'll want to transact at a rational value because they know if we solve our spectrum question by one of these other routes that are becoming available, then the value of their spectrum goes down even more,” he said. Speaking at the conference earlier in the day, Lacavera laid out the “exciting” progress his company has made in attracting new customers and increasing revenues. He said the health of the company was separate from its recent issues with financing. “To properly assess the state of Wind Mobile, one must separate the business itself from its sponsorship and ownership,” he said in a speech. “Despite our significant sponsorship and funding challenges, Wind Mobile has emerged the winner of the new-entrant battle in the critical Ontario, B.C. and Alberta markets, and is now driving record sales in all of our operating markets. “ In March, Wind's majority shareholder VimpelCom Ltd. wrote down the entire value of its $768-million US investment in Wind Mobile, citing “challenges” in the Canadian market. Lacavera announced new financial details in the speech, saying that the company had record sales in April and May after adding 26,000 net new subscribers in the first quarter of 2014. The company now has more than 735,000 subscribers, he said, up from 702,000 at the end of the first quarter, with the company adding a further 21,000 in May alone. In the interview after the speech, Lacavera said paying a viable price for LTE spectrum was a necessity because of his company’s ownership struggles, which have led to problems with financing big expenses such as spectrum licensing, rather than any flaw in the core business of wireless service deliver. “The business of Wind is doing well,” he said. “A fledgling new-entrant, trying to raise financing, we can't overpay for spectrum and then expect the capital markets to finance our operation.” — With reporting by Peter Henderson at phenderson@thewirereport.caand editing by Derek Abma at dabma@thewirereport.ca

Wind seeks LTE spectrum from Shaw, Quebecor

News | June 17, 2014

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Wind seeks LTE spectrum from Shaw, Quebecor

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