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Mobilicity rumoured to launch an IPO Q1 2012, looks to raise $100 million
Wow, can this day get even more interesting? Over the past couple years there has been so much competition in Canadian wireless, usually between the Big 3 (Rogers, Bell, TELUS), and the new entrants. The newer players have made an impact, possibly not as strong as they initially thought, but certainly have helped drop handset prices and monthly rate plans – specifically for those located in Toronto, Calgary, Edmonton, Vancouver, Montreal and Ottawa. In addition, what they have really managed to do is make consumers intensely aware of the high cost of owning a wireless device in Canada.
With all this being said, the price of entering wireless, and competing with the incumbents, might have taken its toll on some carriers. Millions of dollars have been spent into network build outs, acquiring cell sites and ensuring customers are happy. From a subscriber level, WIND is itching towards 400,000 subs, Mobility has “attracted” a total of 250,000, Videotron racked up 253,900, and Public Mobile has 150,000.
Earlier today Bloomberg reported that WIND Mobile is “in talks to buy Mobilicity”, both companies declined to comment on the rumour. Now, coming out of left field is another possible strategy for Mobilicity. The Globe has come forward and stated their sources say that Mobilicity is tinkering with the idea of an initial public offering. If the sources are correct, then we could see an IPO early Q1 2012, coming in between “$15 to $20 per share with an eye to raising $50-million to $100-million”.
The bottom line here, if true, is that Mobilicity, legally named Dave Wireless, is looking at several options. One merging with a competitor, or the other is reaching out to the investor community/public to potentially fund future success (possibly for the upcoming 700-megahertz spectrum auction).
Stewart Lyons, President and CEO of Mobilicity, declined to comment on this rumour as well, stating that “It is business as usual”.
Source: Globe
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37 comments for “Mobilicity rumoured to launch an IPO Q1 2012, looks to raise $100 million”
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so they are strapped for cash…. mobi may not last. Why do you think Dave left? Wind, your move.
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I’m not so sure they’re strapped for cash. I see this less as a way of getting out of financial trouble, and more as securing funds for the 700mhz auction, which Mobi NEEDS to get in on.
They do not have enough spectrum to ever be a national carrier. 700 is their only real chance at that. Same for all the new guys.
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…..Dave left because he did some dumb s**t involving the ROI for the investors and was pushed out by everyone.
Wind doesn’t have any moves to make.
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This would be a far better outcome then WIND buying them. WIND is horrible at competing, they’re caving into temptation for hidden fees, 3 year contracts, and artificial phone mark-ups.
Mobi, I hope this is what you’re really doing. This would be creating new challenges and interesting opportunities. I’d like to see VimpleCom / Orascom give up some ownership and do the same.
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I REALLY hope that Mobilicity can pull through. All we need is for Mobilicity to be bought over by Wind, and then Wind being bought over by the Big 3. Helllllll no.
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Hidden due to low comment rating. Click here to see.
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Buy into the IPO then reap the rewards from a Wind takeover. That should be a healthy chunk of change.
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Hidden due to low comment rating. Click here to see.
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I laughed for a good 5 minutes when reading this. Who in the right mind would buy a IPO of mobilicity. How do you make money off a budget carrier.
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Leap and MetroPCS are budget carriers, and many investors have made a lot of money off of them in the past decade since they have been public.
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Most people think that Dave wireless was named after former CEO- Dave Dobbin. It actually stands for Data & Audio-Video Enterprises.
Just a tidbit
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Was Leap and Metro both in debt when they launched IPO.
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Wind isn’t exactly making a lot of money, I mean are they even breaking even at this point? Wonder how they’re going to come up with the cash to buy Mobilicity & still afford the upcoming 700Mhz auction?
I would be more inclined to believe that Bell will gobble up majority shares when Mobilicity goes public. Then slowly migrate their clients over to Virgin mobile.
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Wind is in the hole to the tune of $1.5Billion (yes, with a ‘B’) and with their ARPU as low as it is, and the cost of simply operating a network, let alone building into new markets and expanding their existing, I can’t imagine them ever making any money.
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“Over the past couple years there has been so much competition in Canadian wireless, usually between the Big 3 (Rogers, Bell, TELUS) and the new entrants”
So uh… so much competition? why do i still pay so much compared to other countries?
Unless that sentence is pointing out how the big 3 do everything they can to prevent other entrants from actually competing. Then my phone bill DOES make sense!
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You’re paying so much because these national carriers are covering one of the worlds most sparsely populated areas. You think network coverage along the highway north of Timmons is cheap?
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Adam is right, comparing Canada’s prices to other ENORMOUS countries, like Hong Kong and India, who’s main coverage areas only need encompass an area the size of the GTA or BC’s Lower Mainland, it’s understandable to see why it’s so expensive to build AND maintain a network here. If you compare the cost to a comparable country, like the US, Canada’s rates (albeit higher) aren’t bad. The American providers can offer slightly lower rates because of the number of high population centres that are so few and far between here.
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Adam, don’t you know Rogers has more AWS spectrum than WIND and Mobilicity combined? They like to hoard spectrum, so they can always use more but they don’t “need their spectrum”.
And 2100 band doesn’t exists by itself in Canada. Conflicts with AWS and 1900.
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The difference is if they bought Wind, they’d inherit all the towers Wind has already built. Far easier to modify those for LTE than build up new ones.
And about 2100, Rogers already has 2100 and transmits using it as well in some areas. Not sure if they’re testing or what, but it’s out there. 2100 is used in Europe alot, it’s great for urban areas, having the potential for faster data connections.
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Rogers uses their AWS for LTE roll-outs. They have no benefit to adding further UMTS/HSPA networks, which is why the spectrum appears “hoarded”. Anywhere there is LTE, there is 2100. And that is what 700 will do as well, provide LTE. You can’t compare spectrum hoarding of Rogers and WIND, 9 million subscribers suck up a hell of a lot more network capacity than a measly 400,000.
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Its simple, John Bitove wants to cash out.
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I’d buy into mobilicity. Seeing as they’d be worth pennies, and a takeover could take the stock up into the dollar range, that’s a solid risk to reward ratio. 10$ for 100 shares, turning that into 1000$?
Or I could go buy a pack of redbull.
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Mobilicity has 150k and are giving away their service for almost nothing. They are desperate for subs to give the illusion they are making headway. In realitiy they will never be able to generate any profit from their existing customer bases and have no chance of attracting new subs with higher arpu. They have been doomed from day one. Wind actually has large industry backing and public invested 10% of what mobilicity has with relatively the same results. An IPO will not help this company at all. You would have to be out of your mind to invest in Mobilicity. Best case scenario for the investors is that Wind buys them and they can recoup some of what they have already lost.
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of course “Jimmy” knows the truth. “Jimmy” knows it all. Mobi is doing by far the best of the new entrants and killing it in Q4. They keep sending emails about the thousands of subs they’re gettign every weekend.
I like how fanboys like “Jimmy” make stupid comments with no knowledge of the situation. By the way Public Mobile is almost bankrupt, has few subs (leaked memo was B.S.) and is desparate to get someone to buy. They’ve gone out and asked everyone to buy them.
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Thousands of new customers at $12.50 per month when it cost you $15.00 per month to keep that customer on your network is a net loss of $2.50 per customers. That equals bad business practice. TCom you are a douche bag.
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the IPO talk and option is a standard discussion to force higher evaluation for a private sale. Thats all, they are trying to find a price they are both happy with
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Exactly when is this spectrum auction occuring and you think it would be wise to hold out on buying a phone before it occurs? i was planning on buying a samsung galaxy s2 X(lte/hercules) to use on wind / moblicity but i might just get a vanilla s2 if they actually get a 700mhz spectrum – does that even make sense? (if they did get a 700mhz spectrum would that give them a larger phone selection base?)
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Don’t hold your breath for the spectrum auction. Talk is that it’s going to be 2012 or even 2013 before the government opens up the bidding. It would be a couple years after that before decent phones start showing up that use the frequencies. Look at the AWS auction… It happened in 2008 and the really great handsets started showing up about a year after that (and even that was probably because T-mobile uses it.)
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The best thing about a Mobilicity IPO is that the public would see exactly how many subscribers it has (not just “attracted”) and whether it’s profitable or not.
Whether it’s $10 per share or $100 per share – the earnings are what’s important. If Mobilicity is profitable, by taking a more conservative growth strategy (Wind could be burning cash as it seeks to expand into less-dense cities like Waterloo) whereas Mobi might actually be breaking even.
An IPO would shine light on how its doing.
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Since Mobi launched, their goal was to get bought out not to make a profit. Think about it, did Canada really need unlimited plans. Yes. But should it be $12.50 or even $25 to make money. Theres initial cost of the spectrum, then cost of building the network, cost of the infrastructure, marketing, cost of getting a new client, and then cost of customer service and many little costs associated with it. These new entrants do not understand Canadian Market. I wanna see how long these guys can carry on like this. As far as their client base is concerned, its questionable because all I am seeing is these people jumping ship between new carriers. Just my 2cents.
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Another guy who knows everything!! This is unbelievable. How do you know with such confidence that their strategy was to get bought out? Such experts on this blog! All the financial knowledge you’d ever want, right here on Mobilesyrup. By the way Mobi has a canadian management team that mostly comes from the big 3. So what would they know about the canadian market, as you said. What an expert!! Should I buy RIM stock? How about Bre-X? Should I buy that too? You know it, buddy!!
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Can’t wait to short these! Hurry!
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“Jimmy” – I didn’t realize you had access to Mobi’s operating costs which are apparently the lowest in the industry. I guess you know from your important position at the company that their operating costs are $15. Stop making things up when you have no clue douchey
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Tcom you wouldn’t know sheep s**t from cherry stones. Mobilicity’s position was aways I repeat aways to be flipped. Just look at John Bitoves business record and for clarity Dave Dobbin was fired. Employees all went out bowling and were called back to the office to the announcement he was sacked. They will be sold to WIND as they are the only available buyer given the CRTC conditions of sale of a new wireless carrier before the five year mark of being awarded their frequency band.
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Am I the only one who caught the “Montreal” typo. Mobi is not available in Montreal !!! If it would… I think Pierre Carl Peladeau (Mr Quebecor/Videotron) would have stains in his shorts !!
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The “T” in Tcom stands for Troll, clearly.
All of teh lulz for him, great points by everyone else, really interesting read.
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I doubt mobi will be bought out, if they sell i think that would be the end of canadian competition as we know it and we would have the BIG 4. so i say lets support the new entrants amd stop arguing over things that dont really matter.
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