Anthony Lacavera recounts how his company (Wind Mobile) nearly went bankrupt around 2014 after government policy changes created conflicting rules on foreign control. The Telecom Act was amended in 2012 to allow foreign control of wireless assets for carriers under a 10% national market share, enabling negotiations with a deep-pocketed Russian partner who agreed to buy them out. However, the Investment Canada Act—separate review for foreign acquisitions—blocked the takeover on national-security/net-benefit grounds, scaring off foreign investors. A later potential sale to Verizon was reportedly dissuaded by incumbent carriers (Rogers, Telus, Bell). After multiple failed sale attempts, the foreign shareholder provided one more funding draw to keep the company afloat.
Chapters
Now you're at, let's say 2014, you're burning all this capital and you're facing bankruptcy. Walk us through the story. So here's what happened. I mentioned that there was a foreign ownership restriction in 2012. Through a lot of lobbying work, the government changed the rules in the Telecom act that allowed foreigners to now control spectrum, which means wireless companies if they had less than 10% national market share. So Rogers, Tellieson Bell couldn't be sold to a foreigner, but win mobile, whose sub 10% market share could be Telecom Act Change 2012. We negotiate with our Russian partner and it ends up that we came to a conclusion where he would buy us out. Okay, he was deep pocketed. He wanted to control the asset and he was the primary funder. And then something funny happened in Canada, which is not uncommon. If I was to take you through the whole project, this happened a few times. So they changed the Telecom act that allows a foreigner to control wireless. We announce sale. We signed a document to sell our interest to our partner, our foreign partner. There's a second act in Canada called the Investment Canada act. And any foreign buyer of a Canadian asset above a certain size triggers this act. And the Canadian government reviews these transactions for two criteria. One is, is it a net benefit to Canada? Very loose. And number two, is it a national security concern? Russian Putin. Harper. La la la la la. Let's just say that the country would not allow that takeover to happen under a different act, the Investment Canada Act. Okay, so Telecom act allowed it, Investment Canada act blocked it. That was, I call it the straw that broke the camel's back where the foreign shareholders said, I don't understand this country. How could this make sense? Time for us to leave. And so in late 2013, we ran a process, you may remember this, but Verizon came to the table and looked very seriously at buying us and actually becoming the fourth wireless carrier in Canada. If that would have happened, that would have changed the Canadian marketing levels we couldn't even contemplate for the better, I assume. Yeah, I think so. Rogers, Talyson Bell went absolutely nuclear, all guns ablazing, and they ended up dissuading Verizon from coming in. So multiple attempts to sell unsuccessful. Our foreign shareholder comes to us and says, we are going to give you one more funding draw. And then you guys figure out what we do from here.
