After failing to obtain financing for a 700MHz spectrum purchase from its Netherlands-based backer, the dark clouds are gathering above the struggling wireless player Wind Mobile: Its parent company, VimpelCom, has written down its investment in the Canadian company. And it did the same with its Ukraine investment as well (via the Globe and Mail).
Wind Mobile’s CEO, however, quickly balanced the news in a statement emphasizing that the decision won’t affect the carrier’s operations.
“First and foremost it has no impact on our ongoing operations. It is an accounting decision that our investors made for their own reporting or their own disclosures. I’m not privy to exactly what the rationale was,” he said. “It is obvious they are not willing to sell their position in Canada for zero, otherwise I’d already own it,” he said.
VimpelCom was interested in taking full control of Wind Mobile but backed off, as it is in loggerheads with the Canadian government over its foreign investment policy. Last year it made the strategic move to step back from taking over the wireless startup, as there were clear signs that Ottawa wouldn’t grant the merger, citing national security concerns.
VimpelCom indicated it is “reassessing” continuing involvement in the Canadian market.
“The company fully impaired its assets in Canada, mainly relating to the challenges the company is facing in the country, which resulted in the strategic decision to withdraw from the 700 MHz spectrum auction and the reassessment of the prospects for continuing operations in the country,” Vimpelcom said in the report to shareholders.
Although Lacavera is positive about Wind’s future, the carrier is for sale. In fact, VimpelCom has been shopping for a buyer for quite some time now. According to the numbers revealed by the carrier, it has more than 650,000 subscribers.
Lacavera, however, admitted that Wind Mobile needs more spectrum to grow, but you may recall that, despite being vocal about its participation in the 700MHz spectrum auction, it was forced to withdraw its application because of a lack of financing.
While the government’s roaming framework does enable a way to gain market share, its future remains uncertain.