One of the new wireless startups has landed $125 million in new funding to accelerate its go-to-market timetable.
Toronto-based Data and Audio Visual Enterprises (DAVE) Wireless said this week that ING Bank and its affiliate ING Capital have arranged a $125 million long-term loan from several institutions that puts it on a solid footing.
“One of the largest banks in the world has vetted our business plan and our progress and feels confident enough to loan us the money,” said Dave Dobbin, the wireless company’s president
“It’s an affirmation of what we are doing.”
However, the company still doesn’t have a carrier licence from the Canadian Radio-television and Telecommunications Commission, which it needs to start operations.
Like all of four startups that won spectrum at last year’s AWS auction, DAVE Wireless has a licence from Industry Canada, but a CRTC licence is needed as well.
The commission is speaking to three of them behind closed doors about whether they meet the terms of the Telecommunications Act for a carrier licence.
But because of its novel corporate structure, the commission held a public hearing last month into Globalive Wireless’ status. All of Globalive’s funding so far has come from Egyptian-based Orascom Telecom, which also holds 66 per cent of Globalive’s equity. However to meet legislative demands, Globalive says Canadians control the company.
A decision is expected Oct. 29.
Privately-held DAVE Wireless is owned by Obelysk, a holding company controlled by Toronto entrepreneur John Bitove, and Quadrangle Capital Partners of New York, which has experience in investing in telecommunications and media companies.
It spent $243 million in last summer’s AWS spectrum auction for spectrum covering southern Ontario, Victoria, Vancouver, Edmonton and Calgary. Still deciding on a new name to go to market with, the company says it will start service early next year in five cities – Vancouver, Calgary, Edmonton, Toronto and Ottawa – although not necessarily all at the same time.
To fill in the gaps in its network, it recently signed a roaming deal with Roger Communications, to go along with a deal for U.S. roaming with T-Mobile.
Although the loan is nice, Dobbin says the equity money from the two shareholders meant the company was funded to “launch to breakeven.” The loan “just makes it easier for the shareholders,” he said.
Meanwhile, the company has a management team, has agreements for handsets with unnamed suppliers, has installed the switch it needs for connectivity to a landline phone system and is working away on its wireless network.
The company hasn’t made its first wireless call yet. But perhaps in a shot at fellow new entrant Globalive Wireless, which recently announced it had made its first test call on its network, Dobbin suggested such a feat is a PR stunt until its network is completely built.