April 12, 2013 8:33am
Back in 2008 our government held a spectrum auction that ushered in new a slew of new carriers who all promised more wireless competition. At the time, Jim Prentice, former Minister of Industry, stated “Our government’s intentions are clear: to achieve lower prices, better service and more choice for consumers and business. We believe in relying on market forces to the maximum extent feasible because competition benefits consumers, and consumers benefit most when markets are as competitive as they can be.”
After eight weeks and 331 rounds the auction closed and raised a massive $4,254,710,327. This brought in WIND Mobile, Mobilicity, Public Mobile, and others. Monthly wireless prices have slightly come down and Canadians do have more choice.
The largest new entrant is WIND Mobile with over 600,000 subscribers, but it’s heavily known that they are looking for buyers. During the auction, Data & Audio-Visual Enterprises Wireless, known in-market as Mobilicity, won 10 licences and invested $243 million. In a report in the Globe and Mail today it was discovered that TELUS is seeking to purchase Mobilicity for a purchase price between $350 – $400 million. TELUS is interested in acquiring “all of the issued and outstanding shares in the capital of Mobilicity” and is “working expeditiously to negotiate and execute definitive agreements in respect of the Acquisition Transaction on an accelerated timeline.”
Mobilicity currently offers their unlimited talk/text/data plans in Vancouver, Toronto, Ottawa, Edmonton and Calgary. Since they’re a private company they don’t need to share their subscriber numbers. Both TELUS and Mobilicity declined to comment.
In another turn of events in Canadian wireless, Public Mobile, the G-band wireless player who operates in Ontario and Quebec, is also seeking a buyer. In 2008 they invested a mere $53 million and the Globe states that Public has “hired bankers to find a buyer, and a small number of pension funds have taken a look at its books. The sale process started because OMERS Private Equity, one of the company’s backers, wants out.” Public is also a private company, but the last known subscriber number had them sitting at 200,000.
A recent study by the Convergence Consulting group estimated that the new entrants – Videotron, EastLink, Mobilicity, Public, WIND – will have 2.35 million wireless subscribers by the end of 2013.