The Harper government’s hope of getting a foreign telecommunications company to plant a flag firmly in Canada has been realized.
Orascom Telecom Holdings – a division of Amsterdam-based VimpelCom Ltd. – said Friday it is going to take complete control of startup Wind Mobile after being its partner and banker for five years.
That will make Wind the only foreign-owned wireless carrier in the country.
The question is whether being firmly in VimpelCom’s hands will help Wind gain more than the tiny market share its has been able to earn in just over three years, or will it get out of Canada.
No one from VimpelCom was available Friday for comment on its plans.
Wind is the country’s fourth largest cellular carrier with 600,000 subscribers in Vancouver, Edmonton, Calgary, Toronto and Ottawa.
That would leave it roughly 7 million subscribers behind the number three carrier, Telus Communications Co.
That has lead to some wondering if after Wind’s modest growth VimpelCom wants to get rid of its investment in here. VimpelCom is a US$20 billion international telecom giant that owns or controls carriers in Russia, Italy, Ukraine and, through Orascom, in Algeria, Pakistan and Bangladesh.
In an interview Friday, Lacavera noted that VimpelCom has said Wind isn’t a strategic asset and is assessing what do to with the Canadian investment.
Amit Kaminer, a research analyst with SeaBoard Group telecom consultancy, recalls a financial analyst has written that VimpelCom put Wind Mobile in a basket of assets to be sold. Wind is the only one left.
Still, Lacavera noted VimpelCom continued to invest heavily in Wind. He said the company is “clearly a viable competitor” to the big three carriers -- Bell Mobility, Rogers Communications and Telus Corp.— which is why he’s retaining a “substantial stake” in Wind.
Ron Gruia, a telecom analyst with Frost & Sullivan, agrees its possible VimpelCom will sell Wind. A sign of its plans, he added, is whether it will participate in the upcoming 700 MHz spectrum auction, or, if it does, whether it will bid aggressively.
Overall, however, he sees VimpelCom’s takeover as positive. “It assures viability of that fourth player in Canada, which I think is vital because it keeps the big three [Bell Mobility, Rogers Communications and Telus Corp.] honest with their prices.”