Globalive Strike Network trades with Telus to increase your chances of buying Freedom

Article content

Globalive has signed a network and spectrum sharing agreement with Telus Communications Inc. This is to set up a table of uncertain and unfinished bids to acquire Freedom Mobile, Shaw Communications Inc.’s wireless unit. It is blocked as Shaw. We are about to complete a merger with rival telecommunications giant Rogers Communication Inc.

Article content

The 20-year contract with Telus, initially targeting Ontario, British Columbia and Alberta, showed that Canadian carriers were the first to begin network and spectrum sharing with purely independent wireless competitors. increase. The acquisition of Freedom Mobile was successful. “

Globalive founder Anthony Lacavera publicly states that the low-cost, competitive wireless market for consumers relies on Freedom’s assets, once owned by Globalive and operated under the banner of Wind Mobile. Repeatedly stated in. Plays a wireless operator, not a current telecommunications player.

In addition to Lacavera’s group, Freedom’s assets are of interest from Montreal-based Quebecor Inc. and Xplornet Communications Inc., a local broadband provider owned by New York-based private equity firm Stonepeak Infrastructure Partners.

Article content

Jeff Fan, a telecom analyst at Bank of Nova Scotia, said he could understand how network and spectrum sharing agreements would benefit Globalive and Telus, but Rogers was “boxed in” by the deal and Freedom Mobile. We believe that we support selling to Quebecor. ..

“With this announcement, if RCI (Rogers) wants to resolve QBR (Quebecor) by July 31, I think it will deal with QBR (Quebecor),” Fan wrote to the client on Thursday. rice field.

Lacavera said he was dissatisfied with how Rogers implemented the Freedom Mobile sales process and was initially under pressure from factors such as the need to sign unnecessarily cumbersome nondisclosure agreements. .. In an interview on Thursday, his deal with Telus, who liked to combine three-lane and six-lane freeways into a nine-lane freeway, strengthened Globalive’s proposal, with optimistic Rogers at the table. Said to come.

Article content

“We submitted an unsolicited offer on March 11th, but we only have a high level of interaction with Rogers and nothing practical,” he said, primarily North American investors. With the support of a consortium of. Baupost Group and Twin Point Capital, private equity firms in the United States. “We want to make it clear to Rogers that we are a very good rescue partner so that we can make the show’s deal a success.”

The sale process was confused earlier this month when the Federal Competition Agency officially opposed the $ 26 billion merger of Rogers and Shaw. In a document submitted to the competition court, the Competition Commission said that the “relief” proposed by Rogers and Shaw was sufficient to alleviate concerns that competition would be detrimental to Canadian consumers. Said not.

Article content

Filing claimed that Freedom shook the Rogers, Telus, and Bell-dominated wireless environment, lowering the prices of the consumers it operates.

Rogers said he would continue discussions with the Competition Bureau while formally responding to the submission, claiming that the court would consider it, but nevertheless promised to sell Freedom “completely.”

In a news release on Thursday, Globalive said, “Long-term network and spectrum sharing is in order to stay competitive in the wireless market in the latest shakeup and make the most efficient use of rare and finite spectra. , Important for the stability of the fourth player. “

Article content

“Newcomers to the industry who have promised to offer lower wireless prices have historically struggled to build a network that is well-competitive with the 25-year lead of existing companies,” the statement said. I am.

“With this transformative agreement (with Telus), Globalive will not only offer consumers low prices and innovative products, but also provide comparable network quality and establish a fiercely competitive environment for decades to come. can do.”

According to Reuters, the deal suggests that Globalive’s bid for freedom has gained support from Terrace, which opposes Quebecol as a buyer. News services have suggested that Telus and Bell separately to regulators and government officials that analysts will be Ottawa’s favored buyers Quebecor should not be allowed to own Freedom Mobile wireless assets I reported that. This is because the company has a history of not using it. The spectrum it got.

Article content

A spokesperson for the Competition Bureau told the Financial Post that the issue could not be confirmed or commented on because the law requires regulators to carry out their work in secret.

Earlier this week, Telus lost a court battle with Quebecor over Quebecor’s suitability to bid on the radio spectrum secured in a federal-supervised auction last year. A federal court judge has ruled that Quebecor is eligible to bid on the spectrum essential for developing the latest generation of technology for mobile phones.

Quebecor paid $ 830 million for this spectrum. This is the main plan for a Montreal-based telecommunications company to expand its mobile services outside of its Quebec location.

Quebecor CEO Pierre Karl Péladeau states that Quebecor is interested in Shaw’s Freedom Mobile assets, but has other options, including the recently mandated Canadian Radio and Television Communications Commission provisions, Bell, Rogers. , Telus requires the domestic network to be open to local players for seven years. Years while they build themselves.

In a conference call with analysts this month, Perado said that major domestic carriers have been reluctant to negotiate arrangements for large mobile virtual network operators (MVNOs), stopping competition. He said it suggests that he has an obstacle to doing so. Fees are to be negotiated commercially between the parties, but if the negotiation fails, CRTC can arbitrate the final offer.

• Email: bshecter@postmedia.com | Twitter: BatPost