Canadian carrier Wind Mobile has faced no small amount of tumult in recent months, culminating in direct control by Orascom and talk of shopping the provider around to the highest bidder. We didn't entirely anticipate just who would take up the offer, however: Fongo, best known for its former Dell Voice initiative, has made an overt bid for Wind. The VoIP provider wants to extend Wind's network network across the country while moving subscribers over to Fongo within the space of a year, theoretically creating a perfect match between cheap cellular access and free internet calling. Before anyone pops champagne corks, we'd warn that there's heavy amounts of publicity and symbolism involved in the acquisition attempt. Fongo is offering $1 and a 49 percent stake in its own venture -- that draws attention to its service, but might not hold up in a fierce bidding war. There may be more involved, but we'll have to wait before we know just how serious the move could be. Wind's parent Globalive has declined comment, while Fongo tells us it's waiting on a formal response before putting more of its cards on the table.
Fongo Makes Public Offer to Acquire WIND Mobile
Company Pledges to Leverage WIND Mobile's Assets to Provide a Truly Innovative Wireless Option to Canadians
WATERLOO, ONTARIO, March 27, 2013 - Fongo Inc., Canada's fastest growing mobile telecommunications company, today announced it is making a bid to acquire WIND Mobile, the Toronto-based wireless carrier.
Launched in late 2009 with backing from Egyptian-based Orascom Telecom, WIND Mobile was the first of several new wireless entrants to attempt to jockey for position in Canada's wireless industry. Orascom is now controlled by Dutch-based VimpelCom, who signalled its interest in selling WIND Mobile earlier this year. In October, the Financial Times reported that in addition to selling-off non-core assets in Canada, VimpelCom is also looking to dispose of its non-core assets in Sub-Saharan Africa, Laos, and Cambodia.
"WIND Mobile has done a fantastic job of signing up some of the most forward thinking mobile consumers in the country and has taught Canadians that there can be alternatives to traditional wireless service," said Jody Schnarr, CEO of Fongo Inc. "By combining WIND's wireless assets with Fongo's proven ability to deliver innovative mobile solutions, Canadians will have true choice and a service that is radically different from anything else out there."
Since February 2012, over 250,000 Canadians have signed up for Fongo's free mobile phone service. Fongo provides a free phone number, unlimited free messaging, and unlimited free calling across Canada through a mobile app that can be downloaded onto any iPhone, iPod touch, or Android phone, regardless of carrier. Many WIND Mobile customers are already using Fongo paired with WIND Mobile data to maximize their savings.
"Fongo has accomplished what everyone told us was impossible-we figured out how to make mobile calling not only free, but profitable," said Dave Bullock, president of Fongo. "We re-imagined how a mobile calling service should work, and the result is saving each of our customers hundreds of dollars a year off their mobile bill."
Currently, WIND Mobile's network coverage is limited mainly to Ontario, with pockets of coverage in Calgary, Edmonton, and Vancouver. As part of the proposed acquisition, Fongo plans to immediately extend the WIND Mobile service offering across the country to mirror Fongo's coast-to-coast free calling network. Current WIND Mobile customers would be transitioned to Fongo over the course of 12 months.
Fongo plans to retain the majority of WIND Mobile's employees, but has pledged to re-think many aspects of the business. "The modern consumer wants to purchase online, receive streamlined service, and pay only for services they use," added Bullock. "The concept of paying $8 a month for voicemail, or being forced to buy airtime minutes when you really only want a data plan-these are outdated ideas that simply exist because 'that's the way it's always been done'."
Backed by venture capital investment and funding from the Government of Canada, Fongo has pledged to match its unique free calling service with equally innovative and disruptive offerings for wireless data. Fongo's offer submitted to WIND Mobile proposes a $1 purchase price and a 49% equity ownership stake in Fongo.
"This story should not end with WIND Mobile being absorbed by one of the incumbent telecommunications companies in Canada," added Bullock. "And it certainly shouldn't end with WIND Mobile being sold to yet another foreign owned telecom conglomerate. Canadians deserve a Canadian owned carrier that provides a true alternative solution."