Wind still has plenty of gas, puffs Lacavera

18 Jun 2014

Wind Mobile’s CEO Anthony Lacavera gave a speech yesterday at the Canadian Telecom Summit in Toronto laying out his company’s current position, in which he stressed that the crucial factor in enabling the mid-sized Canadian cellco to grow will be access to more mobile spectrum for rolling out 4G LTE services – potentially by acquiring frequencies owned by rivals. As reported by Bloomberg, Lacavera said that a merger with financially stricken Mobilicity or another spectrum holder remains desirable in order to compete better with Canada’s three nationwide mobile operators Rogers, Telus and Bell, after Wind was unable to participate in the country’s latest licence auction due to main shareholder Vimpelcom withholding any new significant investment. Meanwhile, the Russian-backed parent group continues to consider its options for its Canadian subsidiary, where it has been blocked from taking voting control by a government decision.

Combining Wind with Mobilicity or ‘other new entrant spectrum’ would be of a significant benefit to both merged parties, Lacavera’s speech noted, while admitting that ‘the challenge we at Wind face is securing any one of these sources of spectrum at terms and value levels that the business of Wind can support, and within the timeframe that the spectrum is needed to meet LTE demand.’ Although Mobilicity’s assets could potentially be snapped up at a discount in bankruptcy proceedings, the court process presents obstacles, the Wind CEO observed previously. Despite the challenges faced, Lacavera has scotched claims that Wind is in danger of folding, calling such reports ‘categorically false,’ and his speech yesterday forecast that the company will turn EBITDA profitable in 2015 on the back of its continuing upturn in both revenues and subscriber numbers. He added that Wind had 735,000 subscribers at the beginning of June after adding 21,000 net new users (including 14,000 post-paid) in May (up from a total of 702,000 subscribers at end-March 2014 and 676,000 at end-December 2013, TeleGeography adds). In a previous interview Lacavera stated Wind needs to find funding of CAD400 million to CAD500 million (USD370 million to USD460 million) to build an LTE network, which would take around two years to complete – while it needs to do this in the next three to four years to compete effectively with Rogers, Bell and Telus, i.e. it must secure the necessary funding and spectrum within two years. In further comments from the Telecom Summit speech quoted by Reuters, the Wind executive declared: ‘I am confident our operating results and the positive momentum of the business will enable us to access the capital markets.’

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