The Rogers–Mobilicity deal means everybody is a winner, says Alek Krstajic, chief executive officer of Wind. His joy is understandable: Wind Mobile comes out a winner from the merger, which received high-speed approval from Industry Canada, and now from the Competition Bureau.
For the wireless startup, which currently serves more than 800,000 subscribers, the deal means a huge step toward deploying its own LTE service, a necessary step for growth, as it is way behind the incumbents when it comes to network speed and reliability, according to the latest data from RootMetrics.
The funny thing is, Wind Mobile played a key role in sweetening the deal for the federal government. A source speaking with the Globe and Mail points this out very well:
“Wind played a key role at the table, but Rogers brought the cheque book,” said a source close to the negotiations.
But the cheque book wasn’t enough: Rogers had a team of 20 people in Ottawa and Toronto to hammer out the deal. As the speedy reply from both Industry Canada and the Competition Bureau shows (alongside the smiley faces of Mobilicity’s creditors), they did a terrific job.
Scotia Capital Inc. analyst Jeff Fan called the transactions, “Probably the best strategic move Rogers CEO [Guy Laurence] has made since joining the company.”
Wind Mobile also negotiated an option to get its hands on half of Mobilicity’s cell sites and equipment for $25 million. Also, it gained new spectrum licences in Manitoba and Saskatchewan, which it is considering selling to MTS or SaskTel.
Even Shaw has benefitted from the deal, as it made a total of $350 million from selling its spectrum licences to Rogers. By comparison, the purchase price of those licences was $190 million back in 2008.