Shaw Buying WIND Mobile in $1.6 Billion Deal

Some big news coming your way from Shaw, as the latter is set to acquire wireless startup WIND Mobile for $1.6 billion, reports The Globe and Mail:

Shaw Communications Inc. is finally poised to get into the wireless business, with a $1.6-billion deal to buy Toronto startup carrier Wind Mobile Corp.

Calgary-based cable operator Shaw announced the transaction on Wednesday evening, noting that while the deal still requires approval from the federal government and the Competition Bureau, it expects it to close during the third quarter of fiscal 2016.

VimpelCom, the last owner of WIND Mobile, sold the company to a group of investors last September, in which sources tell the Globe was around $300 million. Shareholders of WIND include Toronto’s West Face Capital and California-based hedge fund Tennenbaum Capital Partners.

CEO Brad Shaw said in a press release, “This transaction represents a transformational step in the history of Shaw and we are excited about our future growth prospects in mobile,” along with “This growth will be accelerated by combining Shaw’s existing customer relationships, trusted brand and wireline and WiFi infrastructure with Wind’s impressive asset base, including its existing spectrum position and mobile network.”

WIND Mobile with roughly 940,000 subscribers in Ontario, BC and Alberta, is the country’s fourth largest wireless provider, behind incumbents Rogers, TELUS and Bell.

Wind CEO Alek Krstajic said in a statement his team will remain in place, along with “We believe the combination of Shaw and Wind creates a wireless leader with immediate benefits for our customers and employees, giving them more choice, capabilities and opportunities to stay connected,” adding the combination of Shaw will enable the company “to enter into a new phase of growth.”

This July, as part of Rogers’ acquisition of Mobilicity, the former also acquired Shaw’s unused AWS spectrum, which the latter had held onto as it pondered wireless ambitions years ago.

Last week, WIND Mobile announced it had inked a five-year deal with Nokia, to have the latter build the wireless startup’s highly anticipated LTE network.

…more to follow

Founder and Editor-in-Chief of iPhoneinCanada.ca. Follow me on Twitter, and @iPhoneinCanada, and on Google+.

  • 1His_Nibs1

    So I wonder if Shaw will keep WIND’s competitive prices or will they join the other 3 & become the Pig 4?

  • KIII

    I always thought Shaw was owned by Rogers. Is that not correct or was the news last year an April fools or something?

  • Tim

    Shaw is definitely a different company and not owned by Rogers.

  • CellularVictim2549356

    You shouldn’t have to ask; of course they’ll be Pig #4. Wind’s $45/mo unlimited plan will become $90+/mo with less bandwidth.
    They already know how to play the game the existing tri-opoly has been playing for ages.
    Only thing to do is petition the regulators to block this deal.
    If you hear phrases like “good for consumers” you’ll know they’re lying and we’ll get screwed. more. again.

  • Kenneth

    I hope not, thats the main reason I signed up with Wind. I have 3 smartphones, unlimited data, canada calling and texting for $130 total.

  • Ben

    Only problem with being the Pig #4 is the Wind network is no where near the quality of the other Big 3. If they boost price like crazy, they won’t retain any customers since why stay with Wind at high price and bad network when you can at least go with high price and good network…

  • Ashley Mann

    Let’s change up Ronald Reagans famous speech a wee tad shall we?

    ‘The 13’most terrifying words in the English language are, ‘I’m from a Canadian Telecom and I”m here to help you save money’. Lol.

  • KIII

    While I appreciate your view I had hoped for more of an informative response. From Financial Post:
    “Rogers announced on Jan. 14 that it had struck a deal to buy spectrum & a cable division from Shaw as part of a $700-million deal.”

    I’m guessing this mention of cable division must have been what is now Rogers portion of Shomi?

  • 1His_Nibs1

    Well I would imagine (at first anyway) that they would “grandfather” existing customers but for how long? As for increased prices on their plans, I suspect once that quality network is in place via WIND/Shaw/Nokia partnership, that’s when their prices will start to mirror the existing Pig 3. Man I hope I’m wrong. Maybe it’s a good idea to jump on board now & with any luck I’d be in that group of “grandfathered” customers.

  • 1His_Nibs1

    Sadly, you’re probably right. With the Liberals in power I can definitely see this happening. Not so much if the Conservatives were still in power. Sigh.

  • 1His_Nibs1

    I agree with you but now with that partnership announced with Nokia for an upgraded network I can see those prices raising sooner rather than later.

  • Anon

    Until they start expanding their network dramatically and offer 4G LTE, their pricing should remain the same. It’s going to take them many years to expand the Wind network, so I wouldn’t expect a price hike until 2020.

  • 1His_Nibs1

    That works for me but it’s a sad day in the wireless network industry for Canadian consumers. I was glad WIND was around because, however shitty their network was/is, they at least offered a choice other than the Pig 3. Today that choice has gone the way of the dodo bird.

  • Anon

    The only problem with that is you’ll be paying $40+ per month for crappy wireless, for the next 5 years or so until the network is up to par with the others. And even then, it’s not guaranteed that they won’t increase the price on you.

  • Hello Moto

    Coverage is still limited to urban areas though.

  • ????Dennis

    Great post Nibs, I agree.

  • DoctorT

    Shaw used to operate a small area of cable in Hamilton, Ontario – they also bought some wireless spectrum in Eastern Canada – but never used it. Rogers only bought that stuff off them, other than that – they’re completely separate companies.

  • Todd

    I don’t want to sound overly optimistic, but if their network does become par with the incumbents, it may still create for better levels of competition. The big three have around 7 – 9 million wireless subscribers each. Wind has less than a million. If they want a chunk of that they’ll have to remain more than competitive, and the big three will have to create reasons for you to stay with them. The savings may not be blatant to normal consumers, but I predict that savvy buyers will be able to lock in decent discounts via promotions, rententions and win-backs. It’s not all bad, Wind needed someone with the finances to make a competive network and now they’ve got it without being absorbed by the big three.

  • Unremarkable_Username

    Well, the Conservatives did absolutely nothing to prevent Rogers buying Mobilicity and Telus buying Public Mobile, so I’m going to have to say that if the Conservatives were still in power I could definitely see this happening exactly like it did the first two times.

  • 1His_Nibs1

    True.

  • 1His_Nibs1

    For the foreseeable future anyways.

  • Eastvanfan

    Tis the Christmas season I will take the high road and say that consumers are pretty smart and if Wind tries to charge higher prices without having a much more built out network that the stats quo will remain and people will stay with the big 3.

    Why move to Wind if you’re paying higher prices and still have a marginally good reception and slower data?

    I think that they will probably keep prices low for their next couple of years while they build out the network, improve the service and then increase pricing by a small amount per month, still nowhere near the big 3 so they can continue to gain subscribers, otherwise people won’t move and their investment will be a big loss for Shaw.

  • jabohn

    If you go by what they’ve done with their cable prices – they’ll start low and then once they have lots of customers they’ll start raising the prices about $5 per year.

  • view1104

    They could be the first MNVO?

  • 1His_Nibs1

    Sadly, you’re probably right.

  • 1His_Nibs1

    Quote from Shaw CEO:” I see pricing somewhat discounted, but probably closer to the incumbents as we go forward.” Well THAT didn’t take long & I now have my answer. Now competition is DEAD in the Canadian wireless industry. Truly a sad day for consumers!

  • Eastvanfan

    That only works if the service works in your service area. For me in Vancouver it doesn’t work well so o had to go back to Fido. Eventually if you’re paying $30/month, for constant dropped calls and no data consider that a sink cost you’ll never get back.

    I see Wind has now said they’ve upgraded the Vancouver area. It’ll be interesting to see how much better it really is.

  • Eastvanfan

    Take it at face value. They can’t charge the same prices as the big 3 because they don’t have the same network as them. They’ll be discounted for several years still.

    You don’t build out a network in 1 year, it takes at least several years.

    Conclusion, we’ll see but I’m guessing that it will still be cheaper by at least $10/month than current and will have the big 3 sharpening their pencils in 2017/2018 since the actual purchase won’t be approved or not approved in mid 2016.

  • 1His_Nibs1

    Although I like your optimism I still believe there will be a “grace period” & then rices will start to increase but remember Shaw charges the most for their internet packages then the Pig 3. So there’s that

  • Eastvanfan

    Prices will of course rise but I think Todd has it right by his thesis. People aren’t going to change to a very inferior network to save $10/month right away. Why would you do that to get dropped calls and constant no service? You’re then paying for nothing then because you don’t get service.

    As Wind or Shaw builds out the network to a decent coverage then I expect that prices will converge more but overall pricing should decrease a bit for everyone because of more competition.