Wind to launch LTE by end of 2016 with new financing

Wind Mobile is looking to make LTE service available to at least some of its customers by the end of next year, after announcing it has borrowed $425 million to help it do so. On Thursday, Wind issued a press release that indicated it has secured a new financing package worth $425 million that involves backing from Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce. Also involved is Finnverva, the export credit agency of Finland, where the technology provider for Wind's network upgrade, Nokia Corp., is based. Wind said said the money secured would "support its plans for network enhancement and the deployment of LTE," and would be used for a combination of "operational growth and network expansion." A second release from Wind focused on a five-year exclusive contract it has signed with Nokia to provide the technology used in the network upgrade and expansion. Financial details of the agreement with Nokia were not disclosed. “Our partnership with Wind as its sole network infrastructure provider is unique in the industry," Ricky Corker, Nokia Networks' executive vice-president for North America, said in the release. "Wind has put its complete trust in us, and we are committed to helping them bring new technologies and capabilities to the market, and achieve their goal of delivering the best network experience for their customers.” Brian O'Shaughnessy, executive vice-president of technology services at Wind, said in a phone interview that the company expects LTE service to start for some Wind customers by the end of 2016. He said LTE is likely to become available in different phases in different areas, though details about how this will work still need to be determined. "When we're done over the next two years, it will be 100 per cent of the network" where LTE is available, O'Shaughnessy said. Wind operates in major urban areas in Ontario, Alberta and British Columbia. A portion of the financing announced Thursday will be used to add coverage to Wind's network in these provinces, O'Shaughnessy said, though he noted the priority is to "modernize" the existing network. He said AWS-1 spectrum acquired from Rogers Communications Inc. — as a concession for government approval when Rogers bought Mobilicity earlier this year — as well as AWS-3 spectrum bought in an auction in March, will be used in the rollout of LTE service. O'Shaughnessy said upgrades have already been implemented as Wind works toward an LTE network, and customers should start seeing improvements in their 3G service even before LTE becomes available. The release about Wind's partnership with Nokia said the two companies would "bring the most advanced LTE network technology to Canadians." It added that the network would feature a "cloud-based core" and support functions such as voice-over-LTE (VoLTE) and voice-over-WiFi (VoWiFi). "What that gives us is the ability to produce a really solid core network that is the lowest cost that anyone can provide," O'Shaughnessy said. "We're having all the high-end features and focused very heavily on making sure we keep a low cost so we can keep our costs low for our customers as well." O'Shaughnessy said it's premature to say how consumer prices will be affected by the upgraded mobile service. Wind currently advertises smartphone plans with data that start at $35 a month. Supporting VoLTE would place Wind in the same league as Rogers, the only mobile operator in Canada that has so far announced its support for VoLTE capabilities. Rogers makes VoLTE available on its main mobile service brand and its Fido flanker brand. O'Shaughnessy said the VoWiFi functionality will allow devices to automatically switch to a WiFi network for voice calls and texts when that signal is optimal. He said the implications for billing would be nil since all Wind plans have unlimited talk and text in Canada. Johanne Lemay, co-president of telecommunications consulting company Lemay-Yates Associates Inc., said in a phone interview that upgrading its network to LTE is "fairly significant" for Wind. "It's a substantial amount of money," she said of the financing Wind disclosed, "so they should be able to deploy a good LTE build-out with this." Lemay said Wind will be "well positioned" to substantially grow its subscriber base with an LTE network "because their addressable market would expand tremendously. ... I don't think there's any doubt most Canadians now do have LTE or have handsets and various devices that function on LTE." Late last year, Wind reported having 800,000 subscribers, though it has since stopped providing updates on such figures. O'Shaughnessy on Thursday would not speculate on what adding LTE service might mean to Wind's subscriber numbers. "I'll leave that for the future to tell, but obviously it's something that will be exciting for our customer base," he said. Given the low interest rates that are currently available, Lemay said even with this financing, Wind should be able to offer lower prices than the wireless incumbents when its LTE network becomes available. "They may not make the same margins as Telus or Rogers, but they certainly could have attractive margins and presumably be in a price-leadership position," she said. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Wind to launch LTE by end of 2016 with new financing

News | December 10, 2015

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Wind to launch LTE by end of 2016 with new financing

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