Contingent on Globalive acquiring Freedom Mobile
By Amanda OYE
TORONTO – Globalive announced yesterday it has signed a network and spectrum sharing agreement with Telus, contingent on Globalive acquiring Shaw Communications’ Freedom Mobile.
“It’s a transformational agreement – it’s the first of its kind,” said Globalive’s founder and chair Anthony Lacavera in an interview with Cartt.ca.
The agreement, which would span a minimum of 20 years, “marks the first time that a Canadian carrier has entered into a network and spectrum sharing agreement with a pure-play independent wireless competitor,” according to a Globalive press release.
Globalive is the founder of Wind Mobile, which was eventually sold to Shaw and rebranded as Freedom Mobile. Lacavera has been very vocal about wanting to buy Freedom back and has confirmed Globalive made a $3.75 billion all cash offer for it.
The network and spectrum sharing agreement announced today, which would initially cover Ontario, B.C. and Alberta, has been in the works since last year.
As soon as Rogers announced it made a deal to acquire Shaw, Globalive believed the government might require a full divestiture of Shaw’s wireless assets, “and so, we set about assessing the potential of getting back into the business in Canada and what would be necessary in the context of the government requiring a full divestiture,” Lacavera explained. “And so, we approached Telus and said here’s what we we’re thinking about this.”
This year, it became clear Globalive was right to believe Freedom would be sold.
While the CRTC approved the broadcasting side of the transaction, Rogers still needs approval from ISED and the Competition Bureau to acquire Shaw, and in March, Minister of Innovation, Science and Industry François-Philippe Champagne made it clear he would not allow Rogers to acquire all of Shaw’s wireless assets.
Furthermore, last week, the Commissioner of Competition filed applications with the Competition Tribunal seeking to block the merger due to the impact he says the deal will have on wireless competition in the country. In the applications, the commissioner expressed concern about the impact separating Freedom from Shaw would have on its competitiveness.
For Lacavera, the concern is unfounded.
“I am extremely focused on making the argument that a pure-play independent makes sense,” he said. “This idea that a regional cable company like Quebecor must be the buyer really makes no sense at all to me.”
Lacavera argued cable and home phone connections matter less and less to consumers.
“It amazes me that we’re talking about cable and home phone connections or something like this as being necessary to sell a consumer on services. Consumers care less and less and less about their cable and home phone connection… it’s just not the future,” he said.
As such, the Globalive chair believes Freedom can be competitive as a pure-play wireless independent carrier – an argument that is bolstered by its agreement with Telus, which will enable them “to offer the same competitive pricing that we offered with Wind Mobile, but now we’re doing it with a network the quality of Bell, Telus and Rogers’,” he said.
While mentioning people have asked him “why in the world would Telus do this”, Lacavera pointed out that if they acquire Freedom, they will have about 100 MHz of spectrum in Ontario, B.C. and Alberta. “I know there are real benefits to Telus, to be able to share that spectrum with us,” he said.
“We came to a balanced… spectrum and network sharing agreement where we’re both contributing very significant assets to it, and so Telus is getting real benefits for their subscribers with it.” (Bell does not factor into this arrangement at all, Lacavera confirmed, despite having its own network sharing agreement with Telus.)
Globalive also has plans to acquire more spectrum, which would benefit Telus.
“My business plan is such that outside of Ontario, BC, Alberta, the intention is to acquire more spectrum actually, and build a national carrier,” Lacavera explained, while also noting there is currently no plan for them to do anything outside of those three provinces “other than to acquire spectrum and contribute that to the spectrum and network sharing agreement we have with Telus.”
As mentioned, the agreement with Telus is dependent on Globalive successfully acquiring Freedom Mobile.
Whether Rogers is interested in selling to Globalive is unclear, as is whether the sale of Freedom to Globalive would be approved by ISED and the Competition Bureau.
Lacavera indicated they have only had informal discussions with Rogers and are still “are not officially in the [sale] process”, and that they continue to make submissions to the government, making the case for why they are a suitable remedy partner.
Rogers declined to provide a comment for this story.
Laurie Bouchard, the spokesperson for minister Champagne, told Cartt.ca via email: “As the Minister’s recent statement on the proposed acquisition stated, our government is strongly committed to promote competition and ensure cell phone affordability for Canadians. As the regulator responsible for approving the transfer of licensed spectrum, he will review any applications on their merit and what is in the best interest of Canadians.”
