Public Mobile aims to use shareholder muscle to acquire rival

4 Apr 2011

Fledgling Canadian cellular operator Public Mobile expects to have the opportunity to acquire a rival when one of the other new players in the wireless market ‘runs out of money’ by the end of this year, the CDMA-based provider’s CEO Alek Krstajic told a news conference on Thursday, quoted by Canadian Press. ‘I would love to be an acquirer,’ Krstajic said, naming 3G operators Wind Mobile and Mobilicity as the potential targets, and adding that he has spoken to both companies about potential tie-ups. Public Mobile has access to investment capital through its shareholders, a large consortium of US and Canadian private equity firms that make up BMV Holdings. According to TeleGeography’s GlobalComms Database these include: M-C Venture Partners (US), Columbia Capital Equity Partners (US), Canadian pension fund OMERS, Battery Ventures, Charles River XIII GP, Highland Capital Partners, Rho Canada Partners and BMO Capital Corp. Columbia and M-C have previously made startup investment in US operators Nextel, Metro PCS, Leap and Mobile PCS. Public Mobile’s subscriber base remains very small following its launch in May 2010, and it announced last week that it would offer e-mail plans and a new voice-only tariff in an attempt to attract more customers.

Wind Mobile says it does not expect to be acquired, but is ‘open to partnerships with the other new entrants as there is only room for one new national carrier,’ according to its chairman Anthony Lacavera. Wind Mobile is part of the Egypt-based Orascom Telecom group, the bulk of which is soon to be merged with Russia’s Vimpelcom if a pending deal reaches completion. Fellow HSPA-based newcomer Mobilicity is owned by Obelysk (16.1% equity, 62.6% voting share), which is the diversified investment arm of Toronto entrepreneur John Bitove, and Quadrangle Capital Partners of New York (75.9% equity, 22.4% voting share), which is a global investor in the telecoms and media sectors. The three established Canadian national cellcos Bell, Rogers and Telus are prevented from taking over the operations of either Wind Mobile or Mobilicity before 2014 because of the conditions attached to wireless spectrum auctioned in 2008.

Canada, Freedom Mobile, Mobilicity, Public Mobile