CAIRO AND TORONTO – Wind Mobile has agreed to a deal to become fully foreign-owned by Egyptian-based telcom giant Orascom Telecom Holding, with its CEO and founder Anthony Lacavera to resign once the deal is approved by Industry Canada.
The agreement follows recent changes by Industry Canada that frees up telecom companies with less than 10% market share to have no restrictions on foreign investment. As part of the deal Lacavera will transfer all his shares in the wireless upstart to VimpelCom subsidiary Orascom, which already owns 65.1% of the carrier and was an original financial backer of Wind Mobile.
In an interview with Cartt.ca Lacavera cautioned though that given the uncertain regulatory environment in Canada and ongoing opposition from incumbent carriers, it was impossible to say when the deal may close.
Orascom still requires Industry Canada to approve the conversion of Orascom's non-voting shares into voting shares. This would result in Orascom holding an indirect 65.1% voting and economic interest in Globalive Wireless Management Corp. immediately before completion of the transactions with AAL Corp., the holding company that is majority-owned by Lacavera. Orascom currently holds an indirect 32% voting interest and 65.1% economic interest in Wind Mobile, while AAL Corp. currently holds an indirect 66.7% voting interest and 34.3% economic interest.
Lacavera said it was the right time to step aside with Wind Mobile positioned as the fourth-largest wireless carrier with more than 600,000 subscribers. Lacavera founded Wind Mobile in Canada in 2008 when he partnered with Orascom (now majority owned by VimpelCom Ltd.). Since that time, the carrier has launched in Southern Ontario (including Toronto), Ottawa, Vancouver, Calgary and Edmonton. It's oft-stated goal however, was 1.5 million subscribers by the end of 2012.
“Wind is solid enough now to lead the new entrant consolidation which needs to happen ahead of the 700 MHz spectrum auction,” said Lacavera. That auction will happen later this year.
He also noted that with the multitude of flanker brand services the wireless incumbents now offer, which Lacavera calls “dumper services,” it’s impossible for pre-paid based carriers to compete on price in a market where consumers also want the latest expensive smartphones. He believes there’s only room now for one more national wireless carrier in Canada and that can only happen when Wind, and Mobilicity and possibly Public Mobile, merge.
Lacavera now plans to start a venture capital company called Globalive Capital that will focus on telecom, technology and media.
“If there’s one thing I’ve learned during my time at Wind it’s that there’s not enough global capital available for Canadian start-ups and that’s what Globalive Capital will focus on.”
Looking back as CEO of Wind Mobile, Lacavera is particularly proud of the increased competition that the carrier has created in the mobile market which has led to better prices and superior service for Canadians.
“We achieved that despite facing unprecedented legal challenges from the incumbents for the first 18 months following our launch. That we overcame those obstacles is what I’m particularly proud of over the years.”
