Last July the Canadian wireless spectrum auction raised $4.25 Billion – an encouraging start to what promises to be a new era in Canadian wireless competition. While the auction was dominated by the big three, 40% of the licenses were set aside for new entrants. Among the new entrants was the unglamorously named, US equity-backed 6934579 Canada Inc. which quietly spent $52M on spectrum.
6934579 Canada Inc. came out of the woodwork as BMV Holdings in October and promised unlimited voice and text cellphone offerings in Ontario and Quebec for a flat rate of $40 per month. BMV also announced that former Bell Mobility President Alek Krstajic will serve as their CEO.
Today, the wireless upstart announced that they are one step closer to launching their wireless service after securing up to $50 million in financing from the private equity arm of the Ontario Municipal Employees Retirement System (OMERS).
“There are few investors in Canada that can bring the scale and level of sophistication that OMERS Private Equity offers through its investment in BMV,” said Alek Krstajic, BMV’s chief executive officer, in a statement.
The Toronto Star’s Chris Sorenson is reporting today that not everybody is sold on BMV’s plans for the Canadian market.
Some observers have suggested that BMV could have a tough time finding cellphones to sell to its customers because handset makers don’t currently make devices for the swath of spectrum it purchased. Others, meanwhile, aren’t confident that a business model based on cheap spectrum would be enough to support a business plan in a competitive industry dominated by phone and cable operators, or even against other new entrants such as Globalive Communications Corp., which is being backed by Egypt’s Orascom Telecom.
Time will tell if OMERS’ investment in the little guy will pay off.