Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Anthony Lacavera, WIND Mobile CEO, is seen in the WIND mobile store at the Holt Renfrew centre in Toronto on December 15, 2010.

JENNIFER ROBERTS/The Globe and Mail

The latest move by Egypt's Orascom Telecom Holding SAE to take full control of Wind Mobile Canada is thrusting Ottawa's telecom policy back in the spotlight.

Orascom is buying out Wind founder Anthony Lacavera as part of a broader strategy to solidify its control over Canada's fourth-largest wireless carrier, capitalizing on relaxed rules for foreign investment in telecommunications. In addition to transferring his shares to Orascom, Mr. Lacavera plans to resign as Wind's chief executive officer once the deal has closed, putting the company's future in question.

The new federal measures were designed to bolster the long-term viability of Canada's wireless new entrants by giving them access to more foreign capital, but there are questions in the wake of Friday's developments about Orascom's long-term commitment.

Story continues below advertisement

Industry sources say the company is studying several options – one of which includes a sale to one of Canada's three major wireless players. Such an outcome would run counter to the federal government's years-long effort to create new competition in Canada's $19-billion wireless industry.

Despite speculation that Mr. Lacavera's departure from Wind would forge a path to an eventual merger with rival newcomer Mobilicity, industry sources suggest that Wind's foreign financial backers are anxious to cut their losses and sell their Canadian assets. Sources say that merger talks with Mobilicity have recently run cold as Amsterdam-based VimpelCom Ltd., the majority owner of Orascom, mulls a possible sale of Wind to a Canadian incumbent. Rogers Communications Inc. is the name most often floated as the potential buyer.

Earlier this week, Rogers announced plans to purchase an option to eventually buy wireless spectrum from Shaw Communications Inc. and a source suggests the close timing of the Shaw and Orascom announcements is not a coincidence.

But even if Rogers were interested, there is no telling whether Ottawa would ease its ban on incumbents purchasing spectrum from smaller carriers before 2014. The question now is whether the government would create an exemption to this timeline, given that the startups are widely thought to be financially distressed.

"The wild card is whatever VimpelCom wants to do," said a source familiar with discussions among the startups. Should they sell to Rogers, or any of the incumbents, and get government approval to do so, consolidation would be off the table.

Both VimpelCom and Rogers declined to comment.

The uncertainty surrounding Wind is casting a shadow over Canada's other wireless startups, particularly Mobilicity. For more than a year, the company has mulled its options, including an initial public offering or a merger with Wind, but both have remained out of reach.

Story continues below advertisement

Should Wind sell to an incumbent, Mobilicity would lack scale on its own to compete with the telecom giants, Rogers, BCE Inc. and Telus Corp., dealing another blow to competition in the sector. But even if Ottawa blocked a purchase of Wind by an incumbent, consolidation among the startups isn't a sure bet.

"Everybody thinks their company's worth a lot," the source familiar with discussions said. "Nobody can ever agree on valuation."

Asked about its plans for Canada at an investor day event earlier this week, VimpelCom chief executive officer Jo Olav Lunder said the company is still pondering its future.

Once the deal to buy out Mr. Lacavera closes, Orascom will own an indirect 99.3-per-cent interest in Globalive Wireless Management Corp., which operates under the Wind Mobile name. Orascom is taking advantage of new federal measures that allow for 100-per-cent foreign ownership of Canadian telcos with market share of 10 per cent or less.

In addition to the title of "honorary chair," Mr. Lacavera will retain a minority economic stake in Wind.

Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies