Verizon bids for Wind Mobile, in talks with Mobilicity

[Spoon]

TORONTO — Verizon Communications Inc has offered to buy Canadian telecommunications startup Wind Mobile and is also in talks with rival startup Mobilicity over a potential deal, according to sources familiar with the situation.

Verizon came forward with a tentative offer for Wind last week with an offer of $600 million to $800 million, with more specific pricing pending due diligence, said one source familiar with the situation.

The offer comes as a subsidiary of European telecoms company Vimpelcom Ltd withdrew its bid to take control of Wind Mobile from its founder and chief executive, Anthony Lacavera, a move that had created uncertainty about the future of the upstart Canadian wireless company.

Verizon has also approached rival Canadian startup Mobilicity and may be interested in acquiring the struggling wireless player, said another source familiar with the matter.

Verizon’s entry would create a potentially powerful rival to BCE Inc, Telus Corp and Rogers Communications Inc. The three companies are the dominant players in the Canadian wireless market, where prices have traditionally been higher than in the United States.

Verizon declined to comment on the matter. However, last week Chief Financial Officer Fran Shammo publicly confirmed that Verizon was interested in entering the Canadian market.

A Wind spokeswoman and a Mobilicity spokesman both declined to comment.

Verizon Communications bids for Wind, in talks with Mobilicity: sources | FP Tech Desk | Financial Post

[GLOW]

i'm confused. if telus buying mob got kyboshed...how would this get approved?

[FerrariEnzo]

Verizon offers $700-million for Wind, holds talks with Mobilicity

Shit just got real.. good thing im still holding onto a good plan with Wind..

Originally Posted by GLOW

i'm confused. if telus buying mob got kyboshed...how would this get approved?

Because the law forbids robelus to buyout the new entrants to horde spectrum before their first 5 years.. Telus though they could sneak in a deal just before the 5 year term
Also, Verizon was said to be eyeing the Canadian market but could not get in due to foreign restriction.. but now that it was lifted, they are making a HUGE hit but looking to buy both Wind and Mobi.. wow... talk about a force to be reckon with..

[Carl Johnson]

difference is that telus buying these small players are seen by the government as a move that will hurt the consumers because we are going to have less choices in terms of mobile phone services. verizon buying them is a whole different story as they have no presence in canada atm.

[murd0c]

If Verizon does buy them the cell phone game will be an all new ball game.

[BaoTurbo]

Time for shit to get real lol.

[jackmeister]

Just imagine if Wind Home = Wind Network in Canada + Verizon network in US

They estimated Rogers Telus and Bell will lose 1.5 million subscribers to Wind, more like 5 million.

[StylinRed]

i see a move like that just creating a big 4 with big 4 pricing

[willystyle]

The stocks dropped for Rogers, Bell and Telus this morning at the news of Verizon's bid of WIND, with the possibility of buying Mobilicity too.

PROS:

- Verizon has 145 million customers, with more buying power than Robellus combined. Odds are they will carry more variety of different handsets and possibly at lower retail price than Rogers.

- Verizon will operate a US/Canada wireless network that is unmatched by any existing incumbents. This will be a HUGE advantage for Verizon that will offer customers with cheap roaming cost for travelers from both sides of the border.

CONS:

- I don't see Verizon being the savior for low-cost wireless in Canada. In fact, I believe the cost of their products and services will be in-line with the incumbents, except they will have more to offer with their products (huge lineup of phones, etc.) and services (US/CAN Roaming, etc.).

- I can see that existing WIND users will have their phone plans migrated, while new customers will have their plans charged at Robellus prices and more.

Nonetheless, this will be a very interesting year.

[bcrdukes]

Originally Posted by willystyle

T
PROS:

- Verizon will operate a US/Canada wireless network that is unmatched by any existing incumbents. This will be a HUGE advantage for Verizon that will offer customers with cheap roaming cost for travelers from both sides of the border.

I didn't really follow the story but is that a fact or speculation?

I ask because back when Fido was still operating as Microcell Solutions (prior to the Rogers hostile takeover) T-Mobile USA had a huge stake in Microcell/Fido. As large as their network was and counting their European footprint, there was a slight "discount" on roaming rates, but nothing mind blowing or anything that saved you a lot.

The same goes for when Verizon once owned a majority of Telus. Verizon had a hand in building out their networks (landline, DSL, wireless) but no real advantage when it came to roaming. They both at the time had CDMA networks and I believe they still do.

[willystyle]

Originally Posted by bcrdukes

I didn't really follow the story but is that a fact or speculation?

I ask because back when Fido was still operating as Microcell Solutions (prior to the Rogers hostile takeover) T-Mobile USA had a huge stake in Microcell/Fido. As large as their network was and counting their European footprint, there was a slight "discount" on roaming rates, but nothing mind blowing or anything that saved you a lot.

The same goes for when Verizon once owned a majority of Telus. Verizon had a hand in building out their networks (landline, DSL, wireless) but no real advantage when it came to roaming. They both at the time had CDMA networks and I believe they still do.

it's a speculation assuming that Verizon will come in as a player, and not as a competitor. It's one of the arsenal they will bring to attract new customers, without charging rock-bottom monthly rates.

[FerrariEnzo]

Since the wireless market in the US is at a standstill for getting new customers, Verizon making Canada/US No Roaming will definitely attract new subs... It would be stupid not too.. or make it very very cheap for maybe an add-on package for not roaming...

This move will make a big marketshare jump for Verizon up here, im pretty sure of it, since a lot people like to go cross boarder shopping...

[TPMarko]

Bell posted an ad in the province today. States unfair CRTC policies and unfair advantage for Verizon if they came into Canadian Market.

[shenmecar]

Originally Posted by TPMarko

Bell posted an ad in the province today. States unfair CRTC policies and unfair advantage for Verizon if they came into Canadian Market.

In an extensive press release issue today, Bell Canada outlines the three main reasons, and few minor additions, why US wireless providers like Verizon should not be allowed to take advantage of several “loopholes” in the current spectrum acquisition and telecom investment environment.

The main call to order is the limitation on one block of 700Mhz spectrum per region laid on the incumbents, Rogers, Telus and Bell. This theoretically allows a new entrant like Wind or Mobilicity to scoop up more spectrum in a single area, say Southern Ontario, than the incumbents, a move that could potentially limit, Bell says, the expansion of their thriving LTE networks. Verizon, if it enters Canada through the purchase of Wind or Mobilicity, would be treated as a new entrant despite being nearly 10 times the size of the largest Canadian telecom company.

The second issue is what Bell is calling a “free ride on the world-leading networks funded and built by Canadians,” referring to the CRTC mandate that incumbents must share cellphone tower access with their new entrant counterparts. Again, if Verizon was to enter the country through the purchase of Wind or Mobilicity, the incumbents would theoretically be forced to provide access to older networks — in the case of Rogers and Wind/Mobilicity, its 2G EDGE network — where native service doesn’t otherwise exist. Bell thinks that Verizon should be required to build out its own network infrastructure.

Third, and one that doesn’t hold a lot of water, is Bell’s assertion that if Verizon were to enter the Canadian market, it would be able to buy up new entrants like Public, Wind and Mobilicity at “fire-sale prices” because, by virtue of the CRTC’s prohibition against spectrum transfers that results in ”undue spectrum concentration.”

Earlier this year, TELUS attempted to purchase Mobilicity for $380 million, a price many would consider fire-sale, for its precious AWS spectrum. While Bell has not made any moves to purchase spectrum from smaller rivals like Rogers and Telus (the former purchased spectrum options from Videotron and Shaw, which is set to proceed once the abrogation against spectrum transfers is lifted sometime next year).

Bell believes that there is a fair solution to these problems, and they amount to loosening the limitations for Canadian incumbents in the 700Mhz auction, bringing up the possibility of buying two blocks in each region; force US carriers, if they come to Canada, to build out a network themselves; and allow Canadian companies to bid against foreign ones when acquiring local wireless “start-ups,” as they refer to Mobilicity and Wind.

These points make sense in theory, but with the emergence of the two-year contracts and the higher prices that come with them, it appears that Verizon’s entry into Canada may be just the catalyst needed to force down prices in the wireless market.

Source: Newswire

Bell worried about a Canadian market that includes Verizon, urges government to make changes | MobileSyrup.com

[willystyle]

Fuck the Big 3.

[Lomac]

One could argue that Bell started off as an American company... lol

[BaoTurbo]

The offer is down now, but what are the chances it is going to go through? Thoughts?

[FerrariEnzo]

Originally Posted by BaoTurbo

The offer is down now, but what are the chances it is going to go through? Thoughts?

too early to decide... im guessing late Q3 we will know the answer

[willystyle]

Originally Posted by BaoTurbo

The offer is down now, but what are the chances it is going to go through? Thoughts?

In an extensive press release issue today, Bell Canada outlines the three main reasons, and few minor additions, why US wireless providers like Verizon should not be allowed to take advantage of several “loopholes” in the current spectrum acquisition and telecom investment environment.

The main call to order is the limitation on one block of 700Mhz spectrum per region laid on the incumbents, Rogers, Telus and Bell. This theoretically allows a new entrant like Wind or Mobilicity to scoop up more spectrum in a single area, say Southern Ontario, than the incumbents, a move that could potentially limit, Bell says, the expansion of their thriving LTE networks. Verizon, if it enters Canada through the purchase of Wind or Mobilicity, would be treated as a new entrant despite being nearly 10 times the size of the largest Canadian telecom company.

The second issue is what Bell is calling a “free ride on the world-leading networks funded and built by Canadians,” referring to the CRTC mandate that incumbents must share cellphone tower access with their new entrant counterparts. Again, if Verizon was to enter the country through the purchase of Wind or Mobilicity, the incumbents would theoretically be forced to provide access to older networks — in the case of Rogers and Wind/Mobilicity, its 2G EDGE network — where native service doesn’t otherwise exist. Bell thinks that Verizon should be required to build out its own network infrastructure.

Third, and one that doesn’t hold a lot of water, is Bell’s assertion that if Verizon were to enter the Canadian market, it would be able to buy up new entrants like Public, Wind and Mobilicity at “fire-sale prices” because, by virtue of the CRTC’s prohibition against spectrum transfers that results in ”undue spectrum concentration.”

Earlier this year, TELUS attempted to purchase Mobilicity for $380 million, a price many would consider fire-sale, for its precious AWS spectrum. While Bell has not made any moves to purchase spectrum from smaller rivals like Rogers and Telus (the former purchased spectrum options from Videotron and Shaw, which is set to proceed once the abrogation against spectrum transfers is lifted sometime next year).

Bell believes that there is a fair solution to these problems, and they amount to loosening the limitations for Canadian incumbents in the 700Mhz auction, bringing up the possibility of buying two blocks in each region; force US carriers, if they come to Canada, to build out a network themselves; and allow Canadian companies to bid against foreign ones when acquiring local wireless “start-ups,” as they refer to Mobilicity and Wind.

These points make sense in theory, but with the emergence of the two-year contracts and the higher prices that come with them, it appears that Verizon’s entry into Canada may be just the catalyst needed to force down prices in the wireless market.

The main call to order is the limitation on one block of 700Mhz spectrum per region laid on the incumbents, Rogers, Telus and Bell. This theoretically allows a new entrant like Wind or Mobilicity to scoop up more spectrum in a single area, say Southern Ontario, than the incumbents, a move that could potentially limit, Bell says

Verizon needs more 700 Mhz than the incumbents because they don't have the necessary spectrum to build out a national network. Rogers have hogged so much spectrum (1700Mhz, 1900Mhz, and 850 Mhz) in the past few decades that they can build out 2-3 more national networks, but they won't. The same could be said about Telus and Bell, they've hogged so much spectrum from 1700MHz and 1900MHz, just so they can keep competitors out. Ironic.

The second issue is what Bell is calling a “free ride on the world-leading networks funded and built by Canadians,” referring to the CRTC mandate that incumbents must share cellphone tower access with their new entrant counterparts.

Great, so you know the network was built by Canadians, yet you are price gouging Canadians, making Canadians pay for (which will be) the most expensive wireless services in the developed world (particularly with the new 2 year plans that will be in place in a few months)?

Source: Comparing the incumbents? new two-year plans | MobileSyrup.com

Bell’s assertion that if Verizon were to enter the Canadian market, it would be able to buy up new entrants like Public, Wind and Mobilicity at “fire-sale prices” because, by virtue of the CRTC’s prohibition against spectrum transfers that results in ”undue spectrum concentration.”

Bell is just hating cause they can't get their hands wet. Plain and simple. Verizon will not be able to buy them up at "fire-sale prices", when and if, Verizon purchases any of the new entrants. It will be at fair market prices.

From the perspective of a Canadian wireless consumer, if you've seen the new plans that they will roll out soon then you know that we will hit rock bottom in terms of prices, services and affordability. When Mobilicity and WIND came into the market, there was a bit of a shake up, the incumbents did adjust their prices a bit and offered more value (Call Display and Voicemail is now included in all plans). Canadian consumers wanted 2 year contracts, the government obliged, the incumbents didn't like that idea, and turns around now and try to fucked us over with $90/month voice and data smartphone plans. That's the turn in the wrong direction, and those were the prices that we were paying pre-2009. Where the rest of the world is getting better technology, value and prices from their wireless carriers, we are heading in the complete opposite direction, solely because of greed.

Personally, I don't think that Verizon will come in and give us tremendous value and offer us crazy unbeatable wireless plans. However, Verizon is that company that brings financial and market strength that can give a market a shake up, if they choose so, and keep the incumbents in check. That's all I can hope for. Robellus would not want that as they are shitting in their pants at what Verizon can possibly do with their emergence.

A Roger's 3gb data and voice plan will cost Canadians $105/month before tax in a few months.

As a consumer, this can't possibly get any worse, we've already hit rock-bottom in terms of what we pay and is offered. Verizon may not be that Knight in shining armor that will rescue us, but at least, it gives us the hope that it will be a bit more competitive, cause at this point, we don't have anything else to lose.

When you've already hit rock bottom, you can only go up from this point on.

[vafanculo]

Originally Posted by willystyle

Verizon needs more 700 Mhz than the incumbents because they don't have the necessary spectrum to build out a national network. Rogers have hogged so much spectrum (1700Mhz, 1900Mhz, and 850 Mhz) in the past few decades that they can build out 2-3 more national networks, but they won't. The same could be said about Telus and Bell, they've hogged so much spectrum from 1700MHz and 1900MHz, just so they can keep competitors out. Ironic.


Great, so you know the network was built by Canadians, yet you are price gouging Canadians, making Canadians pay for (which will be) the most expensive wireless services in the developed world (particularly with the new 2 year plans that will be in place in a few months)?

Source: Comparing the incumbents? new two-year plans | MobileSyrup.com


Bell is just hating cause they can't get their hands wet. Plain and simple. Verizon will not be able to buy them up at "fire-sale prices", when and if, Verizon purchases any of the new entrants. It will be at fair market prices.

From the perspective of a Canadian wireless consumer, if you've seen the new plans that they will roll out soon then you know that we will hit rock bottom in terms of prices, services and affordability. When Mobilicity and WIND came into the market, there was a bit of a shake up, the incumbents did adjust their prices a bit and offered more value (Call Display and Voicemail is now included in all plans). Canadian consumers wanted 2 year contracts, the government obliged, the incumbents didn't like that idea, and turns around now and try to fucked us over with $90/month voice and data smartphone plans. That's the turn in the wrong direction, and those were the prices that we were paying pre-2009. Where the rest of the world is getting better technology, value and prices from their wireless carriers, we are heading in the complete opposite direction, solely because of greed.

Personally, I don't think that Verizon will come in and give us tremendous value and offer us crazy unbeatable wireless plans. However, Verizon is that company that brings financial and market strength that can give a market a shake up, if they choose so, and keep the incumbents in check. That's all I can hope for. Robellus would not want that as they are shitting in their pants at what Verizon can possibly do with their emergence.

A Roger's 3gb data and voice plan will cost Canadians $105/month before tax in a few months.

As a consumer, this can't possibly get any worse, we've already hit rock-bottom in terms of what we pay and is offered. Verizon may not be that Knight in shining armor that will rescue us, but at least, it gives us the hope that it will be a bit more competitive, cause at this point, we don't have anything else to lose.

When you've already hit rock bottom, you can only go up from this point on.

I agree with most of this, but Robellus is not trying to screw anyone over with higher rate plans.

If the consumer didn't cry to CRTC for 2 year contracts, then rate plan prices wouldn't have changed.

People were greedy wanting a new shiny phone every two years (which they can't afford). What they don't understand is the price of a $600-700 dollar phone does not drop. It stays the same. Now robellus has to charge more to meet the new subsidized strategy. The people got what they want..now they complain prices go up.

As for pricing, its going to be similar as robellus. The big 3 and Verizon rate plans are not that much different. If Verizon comes in, my guess is we will most likely have the big 4.
Posted via RS Mobile

[willystyle]

Originally Posted by vafanculo

I agree with most of this, but Robellus is not trying to screw anyone over with higher rate plans.

Yes they are, Robellus could've easily adjusted the handset contract price by tacking on an additional $100 or $200 to make up for the shortfall. Instead they chose to raise the monthly rates substantially because they no longer have that 3rd year to leech off of customers. That in itself is wrong, and the reason why the government got rid of that 3rd year to bring in 2 year contracts (like the rest of the world). Most consumers don't switch carriers at the end of every contract term anyway, if their service and prices are reasonable, they would just renew. Instead, due to the oligopoly's greed, they jack up the prices nearly two-folds. If you calculate the new monthly rates setting forward, they MAKE MORE money locking up customers on 2 year contract terms than the previous 3 year term.

Currently (Rogers):

Most people are paying -

Plan A: 1GB/6GB Data Plan ($30) + Voice Plan (200 minutes, Unlimited SMS, Free after 6pm etc, VM/CD) ($30) - $60/month

NEW ROGERS PLAN:

Plan B: 6GB Data Plan with Unlimited National Plan, unlimited text, CD/VM (seriously, no one makes phone calls anymore) - $120/month

Plan A

After 3 years = $2160

Plan B

After 2 years = $2880

Price per month speaks for itself. The new pricing plans had nothing to do with making up for the shortfall. It was a middle finger to the government and consumers for taking sides against the oligopoly.

[FerrariEnzo]

Carriers dont need to make money off phones.. thats what their "networks" are for...

[BaoTurbo]

Originally Posted by FerrariEnzo

Carriers dont need to make money off phones.. thats what their "networks" are for...

Carriers don't make money off phones. $800 phone you can't sell it for $1000, they can only subsidize it. The phone is only the bait to lure you into signing the contract so they make money off your rate plan.

IMO I think later the businesses are going to go to the subsidury companies like Koodo/Virgin (Maybe Fido). $75 gives you 3GB data already and unlimited calling and phone wise it's just using the Tab system which is same as any Big 3

[vafanculo]

Originally Posted by willystyle

Yes they are, Robellus could've easily adjusted the handset contract price by tacking on an additional $100 or $200 to make up for the shortfall. Instead they chose to raise the monthly rates substantially because they no longer have that 3rd year to leech off of customers. That in itself is wrong, and the reason why the government got rid of that 3rd year to bring in 2 year contracts (like the rest of the world). Most consumers don't switch carriers at the end of every contract term anyway, if their service and prices are reasonable, they would just renew. Instead, due to the oligopoly's greed, they jack up the prices nearly two-folds. If you calculate the new monthly rates setting forward, they MAKE MORE money locking up customers on 2 year contract terms than the previous 3 year term.

Currently (Rogers):

Most people are paying -

Plan A: 1GB/6GB Data Plan ($30) + Voice Plan (200 minutes, Unlimited SMS, Free after 6pm etc, VM/CD) ($30) - $60/month

NEW ROGERS PLAN:

Plan B: 6GB Data Plan with Unlimited National Plan, unlimited text, CD/VM (seriously, no one makes phone calls anymore) - $120/month

Plan A

After 3 years = $2160

Plan B

After 2 years = $2880

Price per month speaks for itself. The new pricing plans had nothing to do with making up for the shortfall. It was a middle finger to the government and consumers for taking sides against the oligopoly.

But that's what I mean. It is for the shortfall. I do work in the industry. My point isn't to defend the rates. They are much higher. Its more to maintain it isn't something that robellus is doing because they want.

If you have a business, and you are making $100 a year. And then a business entity steps in and says we are changing the rules. Your current module will now make you $60 a year. What do you do?

You didn't include the subsidization in your math. Just the rate plan. Also, overhead wasn't included.

They will profit more by upping the rate plans, definetly..but really not by that much. And can you imagine people having to pay $500 for a phone? Every 2 years?

I think most want a new phone, but cannot afford it, so they would rather choose this option, then to drop near full price on a phone. I always tell people, always buy your phone, but they never listen..or afford it.

Its not confirmed, but I've heard talks of Apple, and that they do not want their phones priced more than x amount. I believe it may be true, otherwise their sales would not be as good. And Apple controls the device market. They sell themselves. Like Walmart, and with their reputation of their way, its possible to believe they can bully the industry like that.

People got what they wanted, but it cost them. Blame the CRTC for not thinking about this.

[shenmecar]

The Canadian wireless soap opera continues today. Two important reports about various plans involving Verizon entering the $19 billion Canadian wireless space.

First, the Financial Post is reporting that Verizon’s board will meet next week to engage in deeper talks about preparing formal papers to buyout WIND Mobile for $700 million. In addition, VimpelCom, Wind Mobile’s foreign owner, is also setting up board meetings next week “to be considering offers to buy the Canadian company.” Of course, both Verizon and VimpelCom declined to comment on the rumoured meetings.

Next, probably more important, is a stunning report by the Globe. According to their “five sources familiar with the matter,” Rogers is orchestrating a plan “to fend off foreign wireless rival Verizon” and is going to financially back Birch Hill Equity Partners to take take controlling ownership in Wind. Yes – Rogers will provide a portion of the money for this to happen, but apparently they wouldn’t receive equity, but “would gain a network-sharing agreement with Wind.” Birch Hill, with cash from Rogers, is also considering acquiring struggling carrier Mobilicity. The finer details of each potential deal are reportedly still being negotiated.

“[Birch Hill] needs a network sharing partner to make the deal happen and they’ve approached Rogers,” said one of the Globe’s sources. “For Rogers it’s all about network sharing. Data demand is growing rapidly and they’re focused on making sure they can meet future data demands.”

In the end, it comes down to spectrum and if any of these situations were to happen we would need the usual government regulatory approvals, plus we’ll also see immediate concerns from the other wireless players, namely Bell and TELUS.

WIND Mobile currently has over 600,000 wireless subscribers, while competing carrier Mobilicity has 250,000 wireless subscribers.

Rogers, after learning from TELUS, is planning to give funds to Birch Hill to buy WIND and Mobilicity. Rogers won't actually own any equity of WIND or Mobilicity. So this doesn't violate any laws, unlike TELUS that did. And, they can keep Verizon out. Rogers is seriously scared of Verizon.