Wind Mobile CEO to step down; Orascom to gain control

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Anthony Lacavera, founder of Canada’s upstart Wind Mobile, plans to step down as chief executive as part of a deal that will give Egypt’s Orascom Telecom control of the carrier, a newcomer to a market long dominated by three companies.

Lacavera, who plans to focus on a new investment initiative called Globalive Capital, will serve in a non-operational capacity as Wind’s honorary chair after the deal closes later this year, the companies said on Friday.

The financial terms of the transaction were not disclosed.

Following the close of the deal later this year, Orascom will own a majority voting and economic interest in Wind, the companies said. The deal is subject to the satisfaction of certain conditions, including regulatory approval for the conversion of Orascom’s non-voting shares into voting shares.

Wind, with a subscriber base that has grown by almost 50 percent over the last 12 months, just completed its strongest quarter ever, said Lacavera in an interview.

Lacavera, 38, founded Wind in 2008, and with financing from Orascom, built it into Canada's fourth-largest wireless carrier with some 600,000 subscribers. Russia’s VimpelCom Ltd now owns a majority interest in Orascom.

“I'm proud of what we've accomplished with Wind bringing real competition to the Canadian wireless space,” said Lacavera in an interview, adding that he will still maintain an economic stake in Wind.

Despite the growth of Wind and other newcomers, the Canadian market is still dominated by the big three players: Rogers Communications, BCE’s Bell Canada and Telus. Each of them has more than 7 million wireless customers.

Wind, managed by holding company Globalive, has faced some significant challenges in its few years of existence, due to foreign ownership restrictions in Canadian telecoms. Canada only last year began to move to ease curbs on foreign investment in the telecom sector, allowing non-Canadians to take control of carriers with a market share of 10 percent or less.

“The company is on a great growth track now, after facing unprecedented legal and regulatory challenges,” said Lacavera. “I shepherded the company through that and got it on a good track and I'm now ready to start Globalive Capital.”

New venture

Lacavera, who was born in southern Ontario, said Globalive Capital will focus on funding early-stage media, technology and telecom companies.

“When I started Globalive Wireless I looked everywhere in Canada for the capital, and I got the door slammed in my face everywhere,” he said.

“I believe that Canada needs Globalive Capital today, as much as Canada needed Globalive Wireless back in 2008 when I started it,” he said. "I've been an entrepreneur and now I have the track-record and resources to help other entrepreneurs."

The move comes just as the Canadian government earlier this week announced a plan to invest C$400 million ($402.5 million) in venture capital in new and existing funds led by the private sector over a span of seven to 10 years.

Lacavera said with increased demand for smartphones, he sees the market moving increasingly toward a postpaid model.

“Talk and text has been left far behind and everybody wants a smartphone now. The reality of smartphones is you are talking about a very significant ticket - there is a need for handset subsidies, Canadian consumers want handset subsidies, and once you are talking about subsidies you are by definition talking about a postpaid model.”

The roughly 90,000 subscribers Wind added in the fourth-quarter were predominantly postpaid customers, Lacavera said, adding that Wind also plans to offer Research In Motion Ltd’s new BlackBerry 10 devices that are set to launch later this month.

“We will certainly be carrying BlackBerry 10,” he said. “I’ve been playing with the BB10 test devices that we have and I have to say they are definitely light years ahead of where they were.”