An Amsterdam-based telecom company seeking to take over Wind Mobile has abandoned its bid for the Canadian wireless carrier.
VimpelCom Ltd. has been quietly negotiating to gain 99.3 per cent control of Wind Mobile for nearly eight months now, but on Wednesday suddenly announced that it was abandoning its application with Investment Canada to acquire the Canadian company. VimpelCom is a subsidiary of Orascom, an international telecommunications company operating GSM networks in the Middle East, Africa and Asia.
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VimpelCom’s bid for Wind Mobile came at a time when Ottawa had recently relaxed foreign investment rules and allowed full foreign ownership of wireless carriers that had a market share of 10 per cent or less as a way of developing a fourth carrier to serve Canadian wireless users in all regional markets. Currently, Bell Mobility, Rogers Communications and Telus Corp., control much of the country’s wireless market.
VimpelCom intended to buy out the stake of Lacavera, who, as CEO of Wind Mobile, holds indirect voting control of the four-year-old company. The deal would have been a test case of the government’s revamped policy.
Last week, it was reported that transactions were bogged down by Canadian officials, who were concerned over the prospect of handing over the company to Russian entity. The major stockholder of VimpelCom is Mikhail Fridman, an energy and telecommunications magnate from Russia.
There were also concerns about Wind Mobile’s network infrastructure being built by Huawei Technologies Co. Ltd., a Chinese telecom equipment manufacturer, which United States politicians have repeatedly accused of sponsoring cyber espionage activities or sabotage of foreign communications equipment.