The Globe And Mail is reporting that Rogers has come up with a very ingenious plan to defend itself against Verizon without in theory ticking off the Canadian Government. Here’s the plan:
Rogers Communications Inc. is backing a Toronto-based investment firm, Birch Hill Equity Partners Management Inc., on a proposed acquisition of Wind Mobile, a financially struggling wireless company with about 600,000 customers across the country, according to five sources familiar with the matter.
The plan would see Birch Hill take a controlling ownership stake in Wind. Rogers would contribute money, but would not get an equity stake in the No. 4 national player. Instead, it would gain a network-sharing agreement with Wind, allowing it to use the smaller company’s spectrum to expand its high-speed wireless service at a time when Canadians are using ever-increasing amounts of data on smartphones and tablet computers.
Birch Hill is also looking at an acquisition of Mobilicity, the industry’s No. 5 national player, say multiple sources – with Rogers as its likely partner. People close to the talks say it is the private-equity firm, not Rogers, leading the deals.
I must admit that that this is very smart. It allows Rogers to take the pieces that Verizon would want off the table without sparking the ire of the Canadian Government as they wouldn’t be the ones doing the buying. There’s a catch though:
But if the government were to allow the deals, it would likely cause an outcry from rivals BCE Inc. and Telus Corp.
That would be a bit of a problem as they’re all friends right now under the logic of “the enemy of my enemy is my friend.” But for Rogers, the logic has clearly changed to “everybody for themselves and to hell with the rest of you” as clearly they want no part of having to compete against Verizon. Now Rogers and Birch Hill aren’t commenting on this. But seeing as the Canadian Government shot the attempt of Telus to buy Mobilicity out of the sky, it will be interesting to see what the feds say and do about this potential deal.
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This entry was posted on August 2, 2013 at 7:33 am and is filed under Commentary with tags Rogers, Wind Mobile. You can follow any responses to this entry through the RSS 2.0 feed.
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Rogers Comes Up With Plan To Defend Itself Against Verizon
The Globe And Mail is reporting that Rogers has come up with a very ingenious plan to defend itself against Verizon without in theory ticking off the Canadian Government. Here’s the plan:
Rogers Communications Inc. is backing a Toronto-based investment firm, Birch Hill Equity Partners Management Inc., on a proposed acquisition of Wind Mobile, a financially struggling wireless company with about 600,000 customers across the country, according to five sources familiar with the matter.
The plan would see Birch Hill take a controlling ownership stake in Wind. Rogers would contribute money, but would not get an equity stake in the No. 4 national player. Instead, it would gain a network-sharing agreement with Wind, allowing it to use the smaller company’s spectrum to expand its high-speed wireless service at a time when Canadians are using ever-increasing amounts of data on smartphones and tablet computers.
Birch Hill is also looking at an acquisition of Mobilicity, the industry’s No. 5 national player, say multiple sources – with Rogers as its likely partner. People close to the talks say it is the private-equity firm, not Rogers, leading the deals.
I must admit that that this is very smart. It allows Rogers to take the pieces that Verizon would want off the table without sparking the ire of the Canadian Government as they wouldn’t be the ones doing the buying. There’s a catch though:
But if the government were to allow the deals, it would likely cause an outcry from rivals BCE Inc. and Telus Corp.
That would be a bit of a problem as they’re all friends right now under the logic of “the enemy of my enemy is my friend.” But for Rogers, the logic has clearly changed to “everybody for themselves and to hell with the rest of you” as clearly they want no part of having to compete against Verizon. Now Rogers and Birch Hill aren’t commenting on this. But seeing as the Canadian Government shot the attempt of Telus to buy Mobilicity out of the sky, it will be interesting to see what the feds say and do about this potential deal.
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This entry was posted on August 2, 2013 at 7:33 am and is filed under Commentary with tags Rogers, Wind Mobile. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.