DAVE Wireless raises more money

Cellular carrier DAVE Wireless Inc., which is not offering service yet, announced Dec. 18 it has raised an additional $75 million.

The Toronto-based company, which spent $243 million in 2008 on Advanced Wireless Spectrum frequencies from Industry Canada, said the $75 million private placement was led by National Bank Financial Inc. and GMP Securities L.P.

The $75 million will be a combination of debt and equity, said DAVE Wireless president Dave Dobbin.

This is in addition to $125 million in debt raised through ING Bank N.V. of The Netherlands.

DAVE stands for Data and Audio-visual Enterprises and is owned by two private equity firms, Toronto-based Obelysk Inc. and Quadrangle Capital Partners of New York. Obelysk, which also manages Canadian Satellite Radio Inc. (which operates XM Canada), is controlled by John Bitove. XM Canada president Michael Moskowitz, a former Palm Computing executive, sits on DAVE Wireless’ board of directors.

DAVE plans to initially offer service early next year in Toronto, Vancouver, Calgary, Edmonton and Ottawa. Dobbin would not confirm the date.

The $75 million funding announcement comes the same week Globalive Wireless Management Corp. started its cellular service in Toronto, using the Wind Mobile brand.

“DAVE can’t just come out with something that’s just mimicking Globalive,” said Jon Arnold, a Toronto industry analyst and principal of J.Arnold & Associates. “They will have to do something pretty different.”

DAVE is not giving any details on its plans.

“We don’t want to let the cat out of the bag with what we’ll be offering,” Dobbin said. “With Globalive, we didn’t know their plans until the day they launched. You can expect the same from us.”

Another company that bought spectrum last year and has announced it will start service next year is Public Mobile Inc., which spent $52 million on spectrum under the name BMV Holdings.

On Friday the Canadian Radio-television and Telecommunications Commission (CRTC) published a letter addressed to Public Mobile stating it will review its foreign ownership and control.

“The Commission considers that based on a preliminary review of the documentation filed to date, the ownership structure of Public Mobile appears to comply with the legal control requirements of the Act,” the CRTC stated, noting the foreign equity was “primarily vendor financing” and the corporate governance provisions “largely follow the guidelines laid out in the BCE and Globalive decisions.”

Public Mobile bid for spectrum in the “G” block, which covers the frequency ranges of 1.910 to 1.915 GigaHertz and 1.990 to 1.995 GigaHertz. At the time of the auctions, there were no handsets on this range, although the company later demonstrated service on ZTE Corp. C78 handset, currently available on MetroPCS Wireless Inc.’s network in the U.S.

Other companies that purchased spectrum include: Quebecor Inc. of Montreal, which operates Videotron; Shaw Communications Inc. of Calgary; and Bragg Communications Inc. of Halifax. Quebecor spent $554.5 million, Shaw spent $189 million and Bragg spent $25.6 million on spectrum.

The newcomers acquired their spectrum in the summer of 2008 from Industry Canada, which made $4.254 billion from the Advanced Wireless Spectrum auction.

Once DAVE Wireless enters the market and Globalive expands its coverage, Canadians in Toronto, Vancouver, Calgary, Edmonton and Ottawa will have a choice of five cellular carriers.

Arnold said the market’s going to become crowded.

“I’ve never been sold on the idea that the market can support more competition of the ilk that we’re seeing,” Arnold said. “Videotron is the only new entrant that has the makeup to be a long-term winner.” 

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now