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A problem facing a Wind sale is the transfer of a control block of stock to the parent company has not been approved.Deborah Baic/The Globe and Mail

For sale: One fixer-upper property with exclusive access to Canada's lucrative wireless market. Comes with stores, customers and wireless spectrum. Buyer beware – the title to the spectrum is not clear, and any purchaser will have to deal with a government determined to pick winners. Overshadowed by bigger neighbours who are very unfriendly. Bids accepted beginning March 22.

That might as well be the advertisement for the Wind Mobile auction, which is up and running as its Dutch owner, Vimpelcom, looks for a buyer for the fourth-largest wireless company in Canada. You can see what Vimpelcom is up against.

Wind ought to be a coveted asset, worth as much as $1-billion, but there are hurdles. The biggest is the Canadian government, which can try to dictate terms. Vimpelcom can't actually sell Wind yet, because it doesn't have the title to its spectrum. The federal government has yet to approve the transfer of a control block of stock from Anthony Lacavera, one of Wind's founders, to the parent company.

That gives Ottawa a lot of leverage at a time when it will be strongly tempted to use it. The coming 18 months are important for the government's attempt to midwife a strong fourth national player in wireless. Three key decisions loom that have the potential to determine the outcome of that process. There is the Wind sale, a coming auction of spectrum, and a ruling on whether to allow incumbent Rogers Communications Inc. to buy a big block of spectrum from Shaw Communications.

The problem isn't keeping at bay the big three wireless companies, Rogers, BCE Inc. and Telus Corp. The government can do that by rigging the auction, denying the Rogers-Shaw plan and putting out the word that incumbents cannot buy Wind.

In a world full of other global companies interested in the Canadian wireless market, that wouldn't be a big issue for Vimpelcom. But in this world, where the number of purchasers appears limited, it is. The only player likely to pay top dollar for Wind is one of the three incumbents.

Saying no to a bid from BCE, Telus or Rogers – one that would otherwise be permitted under Canadian ownership and competition rules – would send an unpleasant message that when it comes time to sell, you may not be able to take the best offer for your business. It is a short-term fix, but it comes with long-term problems. It will be tougher to entice new capital into Canada's wireless business if there is a sense that the options are limited when it comes time to sell.

"The government is trying to desperately to find a way out," said a banker who is trying to drum up a bid for Wind. Policy makers don't want to be faced with situation where the best price for Wind comes from an incumbent that they don't find acceptable. "Are they really going to stand between free enterprise, and say 'No, we only find one buyer acceptable'?" In his view, there's a good chance that that is exactly what happens.

Dvai Ghose, an analyst at Canaccord Genuity, has a similar read on the situation. In a report, he calls the incumbents "obvious bidders" but says that "we strongly question whether Industry Canada would approve a Wind sale to an incumbent, at least until all alternative avenues were exhausted."

Wind's smaller rival, Mobilicity, would also make sense as a buyer. A deal would turn the two competitors into one company with a little more mass to take on the the big three. The problem is that Mobilicity is strapped for cash and fighting a court battle with a major creditor, hedge fund Catalyst Capital. They are expected to be before a judge Tuesday.

How about foreigners? Bankers who have canvassed international wireless companies have found little interest. Wind is just too small for many of them. Carlos Slim's America Movil has 250 million subscribers. Why would he want to pay up to buy Wind's 600,000 subscribers as a beachhead in Canada, where he would still be a distant fourth behind the big three incumbents, all of which have more than seven million? Other huge international carriers face a similar question. The Big U.S. telecommunications companies have all been in Canada – and they all left.

That means the pole sitter in the Wind auction appears to be Mr. Lacavera. He is said to be working with his old partner in Wind, Egyptian billionaire and telecom magnate Naguib Sawiris, on an offer, for which they have already locked up money. In the convoluted world of Canadian wireless, they may not need as much money as their rivals.

(Boyd Erman is a Globe and Mail Reporter & Streetwise Columnist.)

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