Although its major financial backer is looking to sell the Canadian division or lower its investment, Wind Mobile will file a five per cent deposit Tuesday to bid on what is expected to be an expensive auction for valuable cellphone spectrum that starts in January.
In a statement issued late today the carrier said it has “long maintained that there is a dire need for additional wireless spectrum in Canada to ensure the long-term success of any independent wireless provider.
“Wind Mobile has grown into Canada’s fourth national carrier, with over 650,000 subscribers, and we have no intention of stopping now. We would like to take this opportunity to reaffirm our long-term commitment to Canada and we look forward to bringing true mobile freedom to more Canadians.”
Wind’s participation wasn’t clear because Amsterdam-based VimpleCom Ltd. [Nasdaq: VIP], the biggest owner of its equity, is quietly looking for others to take over its share.
Wind said that its immediate parent, Globalive Wireless Management Corp, partnership between VimpleCom and Toronto entrepreneur and Wind CEO Anthonly Lacavera (pictured above), will submit the application.
Wind will be certainly be joined by BCE Inc.’s Bell Canada [TSX: BCE], Rogers Communications Inc., Telus Corp., Quebecor Inc. (owner of Quebec cableco Videotron) to file refundable deposits by noon Tuesday.
The participation of other carriers hasn’t been made public yet. These include financially troubled Toronto-based startup Mobilicity, which Telus wanted to buy until it was blocked by Ottawa. Mobilicity said if it couldn’t be sold it would have to restructure its debt.
Others likely to at least put down deposits include Manitoba Telecom Services (MTS), the incumbent phone company in Manitoba, SaskTel, the incumbent telco in Saskatchewan, and Bragg Group, which owns maritime cableco Eastlink. Eastlink launched its cell phone service this year.
There may also be a few companies making deposits who have no intention of starting a cellphone business but want to squat on spectrum.
The auction, which starts Jan. 14, 2014, will see the country divided into 14 regions where bidders will fight over spectrum. Industry Canada has already set minimum bids. For example, the opening bid for the most valuable paired spectrum blocks covering Newfoundland and Labrador is $1.364 million, for Southern Ontario $69.324 million, and $14.388 million for British Columbia.
But for the purpose of calculating deposits, each region has been given a certain number of points relative to its population. The full deposit for Newfoundland’s paired spectrum will be $1.3 million, for Southern Ontario is $68.12 million, for British Columbia $14.17 million.
A company wanting to put a reserve deposit for paired spectrum in every region of the country will have to come up with $158. 73 million.
Note the deposits will actually be more. The spectrum up for grabs also includes less valuable unpaired spectrum that participants have to bid on as well.
The full list of those filing five per cent deposits won’t be made public by Industry Canada until Sept. 23.
The filing of deposits will not be the official start of the battle for 700 MHz spectrum in the auction. The real start will be on Oct. 29, when those who really want to bid have to come up with the rest of their deposits.
The last spectrum auction, which brought in Mobilicity, Wind, Public Mobile, Eastlink and Videotron, pulled in $4.2 billion for the federal government.