It's official now: Tony Lacavera out as CEO, placed as "honorary chairman"

http://business.financialpost.com/20...tepping-aside/

Chief executive and company founder Tony Lacavera is stepping down at Wind Mobile, the wireless carrier said Friday, with the bulk of his stake being acquired by European conglomerate VimpelCom Ltd., which is assuming full control of the Canadian entity.

For Mr. Lacavera, the departure will cap a bumpy three-year run at the top of the high-profile upstart that aimed to shake up a $19-billion mobile market still dominated by three well-entrenched giants in Rogers Communications Inc., BCE Inc. and Telus Corp.

But Mr. Lacavera says with Wind now on a stable footing, it is time to step aside and focus on a new venture.

“The management is stable, the network is stable, the stores, everything is on a stable growth track and as an entrepreneur I’m comfortable now turning it over to operational management,” he said in an interview.

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Initially backed by Egyptian mobile behemoth Orascom Telecom, the Canadian startup faced unprecedented scrutiny from regulators followed by a protracted legal scrap with competitors which was finally quashed last spring by the Supreme Court of Canada.

Changes to Canadian telecom laws last year allowing foreigners to own telecom operators with less than 10% overall market share spurred Wind’s present backer Amsterdam-based VimpelCom to take control of the carrier.

Mr. Lacavera will retain an economic interest in the company, while receiving an undisclosed amount of cash as well as regaining full control of Globalive Communications, the startup he used to launch Wind in 2009.

The transaction is subject to government approval.



Though the carrier has grown to become the fourth-largest provider in the country — eclipsing rival startup Mobilicity and the wireless units of provincial telcos like SaskTel and MTS Allstream in Manitoba —*Wind has struggled to hit key targets it confidently predicted at the time of launch.

The most glaring is the significant shortfall in subscribers, which stand at 600,000 or nearly two thirds less than the 1.5 million customers Wind expected to have by this point.

Mr. Lacavera shifted Wind’s strategy in late 2011 to a model focused on “postpaid” customers, more closely following the behaviour of the incumbents. The strategy, which subsidizes smartphones in order for customers to avoid the high upfront cost of a device, has led to better subscriber growth, analysts say, but the new entrants as a group have yet to attain the market share observers estimated they would a few years ago.

Mr. Lacavera will remain acting chairman and CEO until the deal is closed and there is no new chief executive named at present, though current chief operating officer Pietro Cordova, who was moved from Wind Italy last spring, may be installed by VimpelCom.

Comment from the European conglomerate was not immediately available. VimpelCom acquired Cairo-based Orascom in late 2010.

Mr. Lacavera partnered with Orascom founder Naguib Sawiris in 2008, agreeing to take a controlling voting stake and minority economic interest in Wind’s parent, Globalive Wireless Management Corp. The move was necessary at the time to comply with Canada’s foreign-investment restrictions in telecom.

For Mr. Lacavera, the 38-year-old will stay on as honourary chair while turning attention toward a new venture fund called Globalive Capital, which will invest in domestic technology, media and telecom businesses.

“There’s a desperate need for telecom media and technology venture capital in this country. There’s no significant growth capital and real risk aversion,” he said.

“There’s tons of venture capital for early-stage mining and resources, but there’s nothing for TMT [telecom, media, technology]. I’m going to fix that over the next five years.”

Not surprising. If I owned controlling interest I'd want my own people in there as well - especially if the company was under performing, which is was under Tony's watch.

I LOL'd @ "Wind is now on a stable footing"

Originally Posted by wheaties

I LOL'd @ "Wind is now on a stable footing"

I know, what a way to dismiss his own failures, or that we're supposed to watch his next venture that will change things over the next 5 years... lol. Tony's a joke, I look forward to all the new changes to come.

He's a 38 year old dinosaur. Just as WIND is changing tact to focus on post paid customers, large carriers in Europe and the US are going in the opposite direction. He seemed clueless and way out of his depth.

Originally Posted by Mann Incognito

He's a 38 year old dinosaur. Just as WIND is changing tact to focus on post paid customers, large carriers in Europe and the US are going in the opposite direction. He seemed clueless and way out of his depth.

Oh his age should have made him better in-tune with the industry, his lack of insight and knowledge was very apparent though right from the get-go and you're right.

Amongst many blunders Tony stated, almost none of them actually came to life.

He didn't get 1.5 million by last month, he didn't solve our 3 year contract problem, and he is alienating the one market segment that basically supported WIND from day one: the prepayees.

Originally Posted by tendenzi

Oh his age should have made him better in-tune with the industry, his lack of insight and knowledge was very apparent though right from the get-go and you're right.

Amongst many blunders Tony stated, almost none of them actually came to life.

He didn't get 1.5 million by last month, he didn't solve our 3 year contract problem, and he is alienating the one market segment that basically supported WIND from day one: the prepayees.

Completely and utterly agree with you 100% (could I be any more emphatic??). The pre paid churn is astronomical, their sub situation would be a heck of a lot healthier had they not alienated their core subscribers.

I won't say that Wind would have reached its 3-year 1.5MM subscriber count had everything gone smoothly right from the start, but they WERE hobbled by the 6-month delay right at the start due to the challenge to their ownership structure by the incumbents.

My best guess is that Wind would probably be very near 1.1MM subscribers today had their roll-out plans not been held up for that six month period. They missed their first Christmas selling season and didn't have their network as built-out as result.

Now that WIND officially has "deep pockets" (subject to CRTC approval), the next steps are for them to buy Mobilicity and to get summa dat yummy 700MHz spectrum.

The honeymoon is over. Finally!

good job ten'zi...

the corp shills are quiet right now.

Meh...........things like this happen in business all the time. The only issue really is whether the next person put in is a go getter trying to climb or a bean counter trying to protect.

"Honorary chairman?" How about "Chief Grand Poobah?" That might help him be taken more seriously in his new role.

500,000 instead of 1.5 million? The glass is not half empty....on the bright side, they're already at 33% of goal

~millergd~

Originally Posted by tendenzi

DEVELOPING STORY:

No names yet, but news broke internally, Tony Lacavera is out. Not bad for my estimates from last year (18 days off). We'll see more details hit probably soon with who is replacing him. It's someone from Orascom from what I heard.

ORASCOM has bought out all remaining assets from Globalive, leaving Globalive with a 0.7% stake in the company. Which it pretty much only put in about that much from the start, if even that.

EDIT: Further information is that any affiliation of Globalive and WIND are to be withdrawn as well. Leaving Tony with Globalive as his own asset, but otherwise nothing of value to Orascom and WIND.

So what are your sources saying about possible acquistions? Is Wind still in the hunt for Mobilicity?

I think Tony is getting way to much blame (and would have got way too much credit if Wind was more successful). The blame lies in a business concept that was very high risk to begin with - regardless of who was running it. The lame economy surely didn't help but I don't believe, in retrospect, that even the best case management and marketing would have yielded the target subscriber level. The capital costs involved to get a new carrier going are a massive stumbling-block towards success.

Well, now that Globalive is out of the picture, it's not a lie if Wind goes ahead and bids in the 700 MHz auction.

Originally Posted by nuclearbroccoli

Someone correct me if I'm wrong, but wasn't it Globalive that stated that they weren't bidding in the next auction?
I wonder if that will change now that Vimpelcom is officially running the show.

Could make for an interesting year...

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Originally Posted by robsaw

I think Tony is getting way to much blame (and would have got way too much credit if Wind was more successful). The blame lies in a business concept that was very high risk to begin with - regardless of who was running it. The lame economy surely didn't help but I don't believe, in retrospect, that even the best case management and marketing would have yielded the target subscriber level. The capital costs involved to get a new carrier going are a massive stumbling-block towards success.

Reaching a target number isn't everything especially when you still have to look at ARPU. As we saw in France with Free Mobile, they offer unlimited everything + intl LD for 20 euros and they gained a couple million customers in 6 or so months. Free is large company so the low ARPU isn't going to kill them but with Wind's questionable backing, it's tough to keep a reasonable ARPU with subscriber growth and expand nationally at a quick rate.

Originally Posted by nuclearbroccoli

Someone correct me if I'm wrong, but wasn't it Globalive that stated that they weren't bidding in the next auction?
I wonder if that will change now that Vimpelcom is officially running the show.

Could make for an interesting year...

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It wouldn't surprise if VC get involved in the auction at some level, I think all this talk from Tony about not competing was nothing more than posturing with a little bit of whining thrown in for good measure. I've been checking around and pretty much everyone of worth thinks WIND will immediately be put up for sale once this deal is approved. Would it be better value to sell with 700 spectrum or without? If rumours are true, VC and Orascom had set aside up to $750M for the auction, is that money still on the table?

Yes, an interesting year indeed.

Originally Posted by e-man

So what are your sources saying about possible acquistions? Is Wind still in the hunt for Mobilicity?

Yes, but it's two fold and being assessed purely for financial gain, which I like to hear.

They acquire Mobilicity and not bid for spectrum, they bid for spectrum and leave mobilicity, or forced a hand to do both, for competitive measures. The talks are heavy, mobilicity wasn't opposed to buy outs from the start, they are obviously a seller looking for the biggest return on investment, this could easily come from Rogers or Bell, TELUS would be the least threatening to Vimpelcom's plans.

Vimpelcom also now has to worry about the still slightly restrictive legislation on ownership. Is it worth going above 10% threshold in Canada? Or focusing on a smaller more profitable network simply to make money and not breach the 10% so they don't have to dish out assets left and right because of some government mandate.

It's interesting to listen to people talk about it who are involved internally, it's cautiously optimistic as in... WIND can be a micro player and it'll be all good, or go big, but that seems to involve less control, becoming a public company and forcing the hand of WIND to start worrying about revenues on a larger scale which puts us back into incumbent level price increases and feature add-on fees.

Now that WIND is finally released from it's shackles, it'll be good to see where the company goes from here.