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.
Wind Mobile’s foreign backer to take over company
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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.”