Wind Founder Wants to Make Freedom Mobile a Competitive Option for Canadians
Antoine Lacavera is ready to buy the company he created in 2008 and sold in 2016.
In an interview with MobileSyrupGlobalive’s founder and chairman said the company was “very serious” about acquiring Freedom Mobile.
“The most important thing for Canadians in the market is that this is a true independent wireless carrier.” Lacavera says this will ensure Canadians the “competitive advantages” that Canada has lacked for so long.
Rogers is seeking to sell Freedom to gain regulatory approval for its merger with Shaw Communications.
The carrier needs the green light from the Competition Bureau and Innovation, Science and Economic Development (ISED) Canada. Yesterday, the company won broadcast approval from a third regulatory body, the Canadian Radio-television and Telecommunications Commission (CRTC).
Lacavera says the recent approval is a step towards clearing the entire transaction and believes “the CRTC’s solution was reasonable.” Rogers’ financial commitment to the production and distribution of Canadian content “is good,” he says.
“I think Rogers will meet the commitments. I think this is a positive result.
The future of freedom with Globalive
Lacavera launched Wind Mobile in 2008 before selling it to Shaw for $1.6 billion.
He says the company has successfully competed against competitors independently and Globalive will do so again to make Freedom the independent company Lacavera needs for Canadians.
“We are the only ones to have successfully competed against the big three for the past 30 years. We are the only ones to have built a viable, autonomous and independent competitor.
Lacavera says he’s confident he’ll be able to do it again because he won’t be starting from scratch, like with Wind, and he’ll focus on prioritizing wireless.
Various companies ensure that even if the wireless business grows, it does not affect the rest of their business model, which includes other services such as broadcast and internet services. “We have to focus entirely on wireless and win the business of Canadians… we are not able to bundle people up and put them in bundle contracts and stuff like that, which are, in my opinion, not good for competition.
Lacavera says that whatever the outcome, there must be a fourth competitor who is a “true independent carrier” and unrelated to the big three.
“We need Freedom restored to how it was when I ran it.” The wind, he said, was completely self-sufficient, with its towers, spectrum, customers and stores.
What he will do differently
Lacavera says that if things went his way when Wind was under Globalive’s control, Freedom Mobile would never have become a company currently in the market. But in the mid-2010s, Wind ran into regulatory issues with the investors Lacavera brought to it.
Globalive invested $442 million in the AWS spectrum auction in 2008 with the help of Orascom, a telecommunications company that operates in the Middle East, Africa and Asia. VimpelCom, now known as Veon Ltd., purchased Orascom in 2011.
Everything was fine for a while, but soon foreign companies had to get regulatory approvals to continue operating in Canada. The companies did not receive approval, and Lacavera said MobileSyrup that Globalive was forced out of business.
Lacavera says he voted against selling Wind at the time. “I would never have done that.” He says the company was built to be competitive and regulatory issues are all that has stopped them.
When asked how Globalive would avoid the same problem if it acquired Freedom Mobile, Lacavera said the “balance of capital” it uses this time is different. “American-origin capital is the bulk of it, whereas the last time it was bypassed it was more foreign capital.”
the Globe and Mail reported Twin Point Capital and Baupost Group are leading the financing.
Lacavera declined to confirm the specific companies or their origin.
While Lacavera thinks the company is protected from problems with Wind’s capital funding, he is careful about the capital he brings in given his past experience. “This time, I feel like I checked those boxes,” he says. But “it’s obviously something that we pay very close attention to.”
Questions in progress
Analysts worry that selling Freedom to a single company could create lasting competition. Lacavera doesn’t think that will be true if Globalive acquires the company.
“Everyone sort of forgets that in 2014 we were the fastest growing carrier in Canada.
Lacavera agrees it’s tough to compete with the big three. He says they have quality infrastructure, brand image and are reliable for Canadians, “but they also charge some of the highest prices in the world.”
“I feel like I’ve taken steps to make sure my investor base is absolutely welcome in Canada.”
He says the formula is for a competitor who offers better value as he fights for every subscriber. The worst thing that can happen to Freedom is if a private equity firm acquires it, because it will “sell it as fast as it can” to make a profit for its investors. This is why he thinks it is essential that Freedom be acquired by a company already active in telecoms.
Lacavera acknowledges that private equity investors support its bid, but says Globalive is leading the proposal. If his company acquires Freedom, he will not eventually sell it.
“I’m not a seller. I wasn’t a seller in 2016…and I have no intention of selling this time around,” he says. to make sure that my investor base is absolutely welcome in Canada.”
Globalive isn’t the only company trying to get its hands on Freedom.
Rural internet provider Xplornet is reportedly in talks to acquire Freedom, but details of the supposed offer are unclear. Xplornet declined to comment for this story.
Videotron’s parent company, Quebecor, has also expressed interest. While the media reports the company has no seat at the table, Lacavera believes Quebecor has an advantage.
The company owns 3.5 GHz spectrum, crucial for the deployment of 5G. Lacavera says he would be surprised if the company did not submit an offer.
MobileSyrup asked Videotron if it had submitted an offer and will provide an answer as soon as it is available.