| TORONTO, June 17
TORONTO, June 17 Canada's Wind Mobile is close
to breaking even on a cash-flow basis and expects to turn a
profit by 2015, its CEO said on Tuesday, improving its chances
of raising much-needed capital as it strives to become the
country's fourth national wireless carrier.
Anthony Lacavera, chief executive of Globalive, which
controls Wind Canada with the backing of Russian-led Vimpelcom
Ltd, said the company has been signing up record numbers
of new customers and only the cost of doing so at a discount is
standing in the way of profitability.
"Wind is on a solid operational footing," he said in remarks
prepared for delivery to the Canadian Telecom Summit in Toronto.
"I am confident our operating results and the positive momentum
of the business will enable us to access the capital markets."
Wind needs a fresh infusion of capital as Vimpelcom,
discouraged by Canadian law that until recently barred foreign
companies from controlling any domestic telecoms, has written
off its investment in the company. Vimpelcom also refused to
fund a Wind bid for 700 MHz wireless spectrum auctioned by the
government earlier this year.
Wind will need financing for years to come as it pushes to
compete on a national basis with the three large companies - BCE
Inc, Telus Corp and Rogers Communications
- that dominate the Canadian industry.
Wind currently operates in three of Canada's most populous
provinces: Ontario, British Columbia, and Alberta.
Lacavera said the widening gap in spectrum ownership between
Wind and the country's trio of dominant companies needs to be
With help, Wind could bid in further spectrum auctions on
the horizon or buy airwaves on the open market, perhaps from
fellow upstart Mobilicity, which is wallowing in creditor
protection after Ottawa shooed away a takeover bid by Telus.
Lacavera said Wind would launch a domestic roaming plan this
year to take advantage of a network-sharing framework the
Conservative federal government aims to pass with its budget.
Dvai Ghose, an analyst at Canaccord Genuity, said that
despite solid evidence of operational growth at Wind, the three
established operators are likely feeling little concern. He
noted Wind's lack of funding, limited coverage and spectrum,
fewer network upgrades, and the fact that it still has just 3
percent of the national market years after launch.
Wind has more than 735,000 subscribers, Lacavera said, with
a little more than half of them postpaid users, who typically
spend more on their phones than pre-paid customers.
By comparison, BCE, Telus, and Rogers have between 7 million
and more than 9 million customers each, with all three of them
skewing more towards lucrative postpaid subscribers.
Wind's operations are close to breaking even in terms of
earnings before interest, taxes, debt and amortization, Lacavera
said. It is showing double-digit growth in service revenue and
subscribers, he added.
Wind had 26,000 net subscriber additions in the first
quarter, and has notched record sales in both April and May, he
said. In May, it added 14,000 net postpaid subscribers.
(Editing by Peter Galloway)