Globalive Communications Corp. is in talks with various lenders to accelerate the expansion of its Wind Mobile cellular brand across the rest of Canada, the company's chairman and chief executive said today.
“We've got to roll out the network as fast as possible,” Anthony Lacavera said in an interview. “This financing is expansion financing.”
Mr. Lacavera would not name any of the lenders, but said the company was looking at various Canadian, U.S. and international banks.
The upstart national wireless carrier, which launched in Toronto and Calgary in December after a regulatory delay, is looking to build out its distribution and infrastructure networks across the country.
The company plans launches in Edmonton and Ottawa in late February or early March, and in Vancouver by early April at the latest, he said.
These conversations are going much better than those Mr. Lacavera was having with lenders back in November, shortly after it was denied by the Canadian Radio-television and Telecommunications Commission.
The CRTC ruled that because of financing by Egyptian telecom giant Orascom Telecom Holding SAE, Globalive was foreign-owned and ineligible to operate in Canada's strictly regulated telecommunications sector.
Industry Minister Tony Clement overturned that ruling in December, allowing Globalive to go ahead with Wind Mobile's launch.
“When we had the regulatory uncertainty and we had the initial launch risks in front of us, there was a different risk profile for investors,” Mr. Lacavera continued. “The good news is there's an appetite for what we're doing.”
Mr. Lacavera would only say that the company was seeking “several hundred million,” and that the number was not small. But one industry source, who did not want to be named, said Globalive was seeking around $700-million, about the same amount of financing the company received from Orascom.
“It's very formulaic,” the source said. “Generally you get private equity firms to help you in the beginning... Then your incremental source is usually the U.S. high yield market. And then you generally do an [initial public offering].”
For a variety of issues, including competition and momentum, “They need as big a footprint as possible as quickly as possible,” the source added.
Wind Mobile is one of several new entrants to Canada's wireless sector, following a spectrum auction back in 2008 designed to introduce more competition. Both Public Mobile and Dave Wireless have launches planned for this year, as does Quebecor Inc.'s Videotron.
Analysts and industry watchers have predicted a gradual erosion of market share from Canada's national wireless incumbents, Rogers Communications Inc. RCI.B-T , Telus Corp., and BCE Inc.'s Bell Canada, which currently control about 95 per cent of the wireless market.
