The announcement today of a $700 million bid for Wind Mobile by Verizon Wireless has caused quite the stir in the mobile Canadian mobile industry, and with the most visible indicators of the impact of this news being the stocks of ROBELUS dropping a staggering 9% in early trading today you can see not only the fragility of the mobile market but also the severity of this news.
Though this bid might cause a point of contention with nationalists, privacy advocates, and carriers alike (who will undoubtedly make a play about being it not being Canadian owned) the reality is that it is in all our best interests. With the changes in telecom regulations by Industry Canada allowing for wireless companies with less than 10% of the overall market share to be owned by foreign companies there is next to no risk of our entire communication system being overrun. Secondly, and arguably more troubling, that even with the former protection rules in place Canada has some of the worst, most expensive wireless service in the developed world. So the reality is that if the tactic of keeping this “in-house” isn’t working, well tough shit ROBELUS, you had your chance and you squandered it, now it is time to let others in and give them a chance to try and show you how to run a better wireless company.
The interesting part of this deal is not just that Wind is being bought but that Mobilicity is also rumoured too be in the sights of Verizon. This is actually a very smart idea for two reasons. Firstly because, while Wind and Mobilicity each only have 10 MHz of spectrum in many key places (making a fast and expandable network quite a challenge), ROBELUS was able to score 20MHz almost across the entire country. With the combination of this spectrum Verizon would be able to create a viable option for a robust network on which to start an expansion in Canada (although this would unfortunately still do nothing about not owning spectrum in Quebec). Secondly, where Wind decided to go it alone and build their own towers and transceiver infrastructure Mobilicity chose to sign a tower sharing agreement with Bell Mobility. This means that the two networks can work together to make a stronger network in urban areas (something which is a necessity with AWS) by filling in each others dead spots.
So, all things considered, though there are many reasons why one shouldn’t support this takeover, the reality is that telecom companies in Canada had their chance, wasted it, and now need to pay dearly for their mistake.
