Wind Mobile withdraws from wireless spectrum auction

Bidding begins for 700 megahertz wireless waves in Canada, Tuesday, Jan. 14, 2014.

TORONTO -- On the eve of the wireless spectrum auction, new wireless player Wind Mobile said it's withdrawing from bidding due to a lack of funds.

Wind Mobile CEO and chairman Anthony Lacavera says majority owner, Russian telecom VimpelCom, has decided not to fund the company's participation in the 700 megahertz spectrum auction that starts Tuesday.

The small carrier has been trying to become Canada's fourth major wireless carrier after big players Rogers (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T), which dominate the market with more than 25 million subscribers among them.

Wind Mobile's withdrawal doesn't bolster Ottawa's attempt to have a fourth wireless carrier in every region of the country. Wind has more than 650,000 subscribers and operates in Ontario, Alberta and British Columbia but was put up for sale by VimpelCom.

While Lacavera says it's business as usual for the company, not being able to participate in the auction leaves Wind with a shortage of spectrum to upgrade its network.

Lacavera still owns 35 per cent of the company he founded and says VimpelCom is continuing discussions with the federal government and him about the company's future.

A total of 10 Canadian participants -- including the big three -- are bidding on the 700-megahertz radio waves now that Wind Mobile has dropped out.

The previous spectrum auction in 2008 raised $4.3 billion and ushered in new players: Wind Mobile, Mobilicity, Public Mobile, Videotron and Eastlink.

Since then, Mobilicity has been put up for sale and Public Mobile has been sold to Telus.