Globalive strikes network deal with Telus to boost its chances to buy Freedom

Globalive is trying to shore up its bid to acquire Freedom Mobile, the Shaw Communications Inc. wireless unit valued at up to $4 billion that is on the block as Shaw attempts to complete a merger with rival telecom giant Rogers.

It is the first time a Canadian carrier has entered into network and spectrum sharing with a pure-play independent wireless competitor, but it is conditioned on Globalive.

Anthony Lacavera, the founder of Globalive, has said publicly and repeatedly that a competitive wireless market with lower prices for consumers depends on the Freedom assets being put in the hands of Wind Mobile.

Lacavera's group, as well as Montreal-based Quebecor Inc. and New York-based Stonepeak Infrastructure Partners, are interested in the Freedom assets.

Jeff Fan, a telecom analyst at Bank of Nova Scotia, said he can see how the network and spectrum sharing agreement is beneficial for Globalive and Telus, but thinks Rogers would favour Freedom Mobile.

Fan wrote in a note to clients that they think this announcement will encourage RCI to deal with QBR if they want to have this resolved before July 31.

Lacavera is unhappy with the way Rogers has conducted the Freedom Mobile sales process, and said Globalive was initially squeezed by factors including a requirement to sign a non-disclosure agreement. In an interview Thursday, he said the arrangement with Telus strengthens Globalive's proposal, making him optimistic Rogers will come.

He said that he has the backing of a consortium of mostly North and that he has only high-level interactions with Rogers.

The sale process was thrown into disarray when the Competition Bureau objected to the merger of Rogers and Shaw. Rogers and Shaw's proposal was not enough to allay the Commissioner of Competition's concerns that competition would be lessened to the detriment of Canadian consumers.

The filing argued that Freedom had changed the wireless landscape by lowering prices for consumers where it operated.

Rogers said it would continue talks with the Competition Bureau while formally responding to the filing with its arguments to be weighed by the tribunal, but still pledged to sell Freedom in its entirety.

In a news release Thursday, Globalive said long-term network and spectrum sharing is critical for fourth-player stability, to ensure competition remains in the wireless market.

The statement said that new entrants to the wireless industry have struggled to build networks that can compete with the incumbents.

Globalive would be able to provide consumers with lower pricing and innovative offerings, as well as deliver on-par network quality, thanks to the transformational agreement with Telus.

According to a report Thursday, Globalive's bid for Freedom has support from Telus, which has opposed Quebecor as the buyer. The news service reported that Telus and Bell have told regulatory and government authorities that Quebecor should not be allowed to own the Freedom Mobile wireless assets because the company has a history of not using the spectrum it has obtained.

The Competition Bureau is required by law to conduct its work in a manner that is confidential.

Telus lost a court battle this week with Quebecor over the latter's suitability to bid on wireless spectrum set aside in an auction overseen by the federal government last year. A Federal Court judge ruled that Quebecor was qualified to bid for the spectrum that is crucial for developing the latest generation of technology for mobile phones.

Quebecor paid $830 million for the spectrum, which is a key plank of the Montreal-based telecom company's plan to expand mobile services outside its Quebec stronghold.

Shaw's Freedom Mobile assets are one of the things Quebecor is interested in, but has other options, including Canadian Radio-television and Telecommunications Commission provisions that require Bell, Rogers, and Telus to open their doors.

On a conference call with analysts this month, Péladeau said that the big national telecom players have been reluctant to negotiate the wholesale mobile virtual network operator arrangements. If negotiations fail, final offer arbitration by the CRTC is available.

Email: bshecter@postmedia.com