Mobilicity, a struggling independent wireless carrier serving some of Canada’s largest cities, will end its efforts to compete with larger wireless companies if a court approves its sale to Rogers Communications, Canada’s largest mobile operator.

Late this afternoon, sources told The Globe and Mail Mobilicity accepted an offer from Rogers in excess of $400 million to acquire the wireless company’s assets and transfer some of its wireless spectrum to Wind Mobile Corp., one of the last remaining Canadian independent carriers, to appease regulators, who could still block a deal with Rogers.

The federal government’s wireless telecom policy has stressed the importance of having at least four wireless providers competing in every region. Wind has managed to achieve that in Ontario, B.C. and Alberta, but lacks enough coverage elsewhere. Mobilicity landed itself in financial trouble soon after launch, finding the costs of network construction high for a company with below-expected customer numbers.

Mobilicity has been under creditor protection since September 2013 and has only managed to keep 157,000 active customers on its discount cellular network. Rogers is said to be interested in Mobilicity primarily as part of a tax write-off strategy. Mobilicity had non-capital loss carry forwards of $567-million by the end of 2013, which offers Rogers a reduction in its tax bill of about 25 to 30% of that amount.

Observers predict Mobilicity could continue for a time, if in name only, as part of Rogers’ larger portfolio of wireless brands. Rogers already controls two other Canadian wireless brands: Fido and Chatr.

As late as yesterday, Rogers and Telus were both fighting to acquire Mobilicity after it became clear there would be no “white knight” for Mobilicity that would satisfy competition regulators or creditors. Telus attempted an acquisition twice, only to be rebuffed by the Competition Bureau. A last-ditch effort by Wind Mobile to acquire its comparatively sized competitor was a flop with creditors who expected a higher bid.

Mobilicity’s network coverage was always one of its biggest challenges. The company only managed to offer direct coverage in parts of the Greater Toronto Area, Ottawa/Gatineau, Calgary, Edmonton, and Greater Vancouver. Mobilicity’s network also relied on very high frequencies that had a challenging time penetrating buildings, and its lack of network densification led to complaints about dropped calls and poor coverage overall.

The disposition of an earlier plan submitted by employees and Mobilicity’s founder to transform the company into an MVNO — providing independent wireless service using its acquirer’s network, isn’t known at press time.

[flv]http://www.phillipdampier.com/video/BNN Clock ticking on Rogers and Telus to conclude Mobilicity takeover 6-22-15.flv[/flv]

As late as yesterday, BNN was reporting Telus and Rogers were both competing to acquire Mobilicity. It appears Rogers has won. (2:23)

John Malone’s cable systems in Europe share little in common with what Americans get from their local cable company. In Switzerland, Liberty-owned UPC Cablecom charges $95 a month for 250/15Mbps service — a speed Charter Communications customers cannot buy at any price. Liberty is Charter’s biggest investor/partner. Later this month, Swiss cable customers will be able to buy 500Mbps from UPC. When implemented, that is expected to push Switzerland’s broadband speed rankings into the global top-10. Currently Switzerland is rated #11. The United States is #28 and Canada is ranked #34.

UPC’s primary competitor  — telephone company Swisscom — is aggressively upgrading its facilities with its eye on offering G.fast, the latest version of DSL capable of delivering up to 500Mbps across 200-300 meters of old copper phone wiring, making it suitable for fiber to the neighborhood deployments similar to AT&T U-verse or Bell’s Fibe. Swisscom is also expanding fiber to the home service on a more limited basis, offering customers 1,000/1,000Mbps service on that network.

Tveter

Why all the upgrades? Competition in the Swiss broadband marketplace.

If Swisscom can offer gigabit broadband speeds, then so can UPC Cablecom, claims its CEO Eric Tveter.

“We can offer every customer across the country the same speeds,” Tveter told the Schweiz am Sonntag newspaper. “At the end of June, we will introduce new Internet speeds of 500Mbps. Demand for [fiber’s] symmetrical speeds is still very low among residential customers, but if demand increases we will offer them.”

Customers looking for gigabit speed would likely have to sign up as a commercial customer of UPC for now. But the company is preparing to introduce DOCSIS 3.1 which will allow the existing cable network to easily deliver gigabit speeds to residential customers. In fact, Tveter is looking at introducing 10Gbps speeds in Switzerland in the coming years.

Tveter aggressively criticized some of his biggest competitors for using marketing-speak to promote “new” products UPC already offers.

Some providers have promoted “cloud-based” on-demand access to video that Tveter says has been available from the cable company for several years.

This year, UPC Swisscom has been reassuring customers it does not allow America’s National Security Agency to spy on its customers and has taken measures to keep Chinese intelligence agents and hackers out of its network. The Swiss courts have made it clear they want nothing to do with NSA spying and permit operators to take any and all steps to keep unauthorized American and Chinese agencies from penetrating Swiss telecommunications.

Tveter points out all Swiss networks use equipment manufactured by U.S. and Chinese companies, but there are no indications either government has forced manufacturers to give back-door access to that equipment for surveillance or espionage purposes.

UPC Cablecom also voluntarily adheres to Net Neutrality principles for its Swiss customers.

[flv]http://www.phillipdampier.com/video/Swisscom fibre optic network 2014.mp4[/flv]

Swisscom shows the advantages of its fiber to the home network. (1:54)

Today’s offer by Altice SA to spent $11 billion to acquire France’s Bouygues Telecom and combine it with Altice-owned Numericable-SFR to create France’s largest wireless operator is not playing well in some quarters of the French government.

Patrick Drahi’s announcement he was borrowing the money to finance the deal worried France’s economy minister Emmanuel Macron, who felt Drahi’s leverage game in the mergers and acquisitions business came with a massive debt load that could have major implications on French taxpayers.

“I don’t want to create a too-big-to-fail player with such a leverage and it’s my role to … deliver such a message,” Macron said. ”If the biggest telecom operator blows up, guess what, who will pay for that? The government, which means the citizens.”

Macron is partly referring to the upcoming French wireless spectrum auction that will make more wireless frequencies available to the wireless industry. The proceeds will be paid to the French government and a default by Altice could have major implications.

Macron

Macron, himself a one-time investment banker at the Rothschild Group, said he was not fooled for a moment by Drahi’s claims the merger would benefit French consumers, especially at the overvalued price Drahi was willing to pay. Macron estimates Drahi has offered almost double the total market value of Bouygues Telecom, a conglomerate that also includes road construction and maintenance, commercial construction and television businesses — all elements Drahi would likely discard after the merger.

“All the synergies which could justify such a price are in fact about killing jobs,” Mr. Macron said. “At the end of the day, is it good for the economy? The answer is ‘no’.”

The merger deal is probably not good news for consumers either. France’s ongoing wireless price war among the four current competitors has reduced the cost of wireless service to as little as $3 a month since low-cost player Iliad broke into the French mobile market three years ago.

Virtually every French telecom analyst predicted the merger would be the beginning of the end of France’s cheap wireless service. Investors cheered the news, predicting higher priced wireless service would boost the value of their stock and increase profitability, while reducing costs. The deal’s defenders said ending the price war would attract necessary investments to upgrade French wireless networks and limit the impact of a bidding war for new wireless spectrum.

Drahi’s style of indebting Altice while slashing expenses at acquired companies has earned him suspicion from French officials.

Drahi’s style of doing business again raised concerns among several members of the French government. Drahi is notorious for severely slashing expenses at the companies he acquires, usually firing large numbers of middle managers and “redundant employees” and alienating those that remain.

But vendors complain they are treated even worse than Drahi’s employees. Electricity has been cut at Drahi-owned facilities for non-payment, employees have been expected to bring their own toilet paper to the office, and copying machines have been known to run out of toner and paper after office supply firms went unpaid for months.

After his $23 billion acquisition of SFR, the country’s second largest mobile operator, Drahi ordered SFR to stop paying suppliers’ outstanding invoices until vendors and suppliers agreed to massive discounts of as much as 80% on current and future invoices. A government mediator was forced to intervene.

Macron doubts Drahi has the interest or the financial resources to invest in Bouygues’ telecom business. Drahi has already indebted Altice with a spending spree of more than $40 billion over the last year acquiring Suddenlink Communications, SFR, and Portugal Telecom.

Drahi’s acquisition machine is fueled by “cheap debt” available from investment bankers looking for deals to meet investors’ demands for better yields from corporate bonds. Safer investments have faltered as interest rates have fallen into negative territory in parts of Europe.

French lawmakers, particularly those aligned with France’s labor unions, accuse Drahi of acting like a bulimic debtor and feared his splurge would eventually lead to a banker-forced purge and government bailout if he cannot meet his debt obligations in the future.

“If I stop my so-called bulimic development, I won’t have any debt five years from now. That’s idiotic, I won’t have any growth for five years,” Drahi curtly replied. “I think it’s better to continue to produce growth all while keeping a foot close to the brakes and looking in the rear-view mirror.”

Finance Minister Michel Sapin scoffed at the apparent recklessness of America’s J.P. Morgan and France’s BNP Paribas investment banks who readily agreed to offer financing for the deal, despite Drahi’s existing debt.

“We must be careful not to base an empire on the sands of debt,” he warned.

[flv]http://www.phillipdampier.com/video/Reuters French government hardens stance on Altice bid for Bouygues Telecom 6-22-15.flv[/flv]

Reuters reports Altice may be vastly overpaying for Bouygues Telecom and that has the French government concerned about creating a “too big to fail” telecom operator in France. (2:04)

Customers of Lithuania’s Teo are getting a free speed upgrade — from 500Mbps before to 600Mbps now — on the company’s fiber to the home network. They are also paying less than half the price of what you pay for 15Mbps.

“Internet bandwidth is constantly increasing and high-speed becomes a market norm,” said Teo’s Nerijus Ivanauskas. “Therefore, we see that the added value that customers receive from purchasing a basic service becomes an increasingly important factor when choosing a service provider.”

Lithuanians have several choices for broadband service and price competition has kept broadband speeds faster than what North Americans typically receive, at a fraction of the price. Fiber to the home service is increasingly common in populated areas and is very affordable. Budget-minded customers happy with 100/100Mbps Internet access can get it from Teo for less than $13.50 a month.

Teo’s fiber network passes 837,000 households as of the first quarter of this year. That represents almost 70% of Lithuania. Lithuania was already well ahead of the United States and Canada, with an average broadband speed of 45.11Mbps — 4th place in the European Union and 9th fastest country in the world. Teo also leads the world in fast Wi-Fi. More than 3,000 Teo hotspots serve up speeds averaging 15.4Mbps to every connected client.

As broadband speeds continue to soar in Lithuania, Internet Service Providers have been forced to offer extras to customers to compete. Teo offers 300GB of free cloud storage space, free anti-virus protection, and special parental controls to help protect children from adult content.

[flv]http://www.phillipdampier.com/video/Teo Internet Speed Lithuania 6-2015.mp4[/flv]

A Teo advertisement showing off its fiber broadband speeds, ubiquitous free Wi-Fi network, anti-virus and child protection features. (0:45)

Wireless World of Emerson

A Verizon Wireless salesman that left a voicemail message offering a customer a new service plan that could save her money forgot to hang up the phone when he finished his message and broke into song singing, “Lies, lies, lies, selling lies” while criticizing his co-workers for reneging on the savings he promises.

“David” from the “Verizon Wireless Store” called Kristin Capone because she had evidently bought a phone from him last year.

“I’m just calling my customers letting them know that earlier this month there were changes in the price plan and there is a chance I can save you money,” David offered.

After thanking her for her time, the employee at Wireless World of Emerson, a “Premium Verizon Dealer” in Emerson, N.J., did not bother to hang up, and had some choice words for Capone and his co-workers that Capone shared on YouTube.

“Lies! Lies! Lies!,” David sang. “Selling lies. Can’t save her a f@@@ing dime. Come in, we’ll save you some money. Just like that. She comes in, sees to one of you guys. You guys look in and say, oh no, there’s nothing we can do and then I end up looking like a dou@@e and then she won’t want to buy.”

“David” seems to acknowledge his bad attitude at the end of the message.

“I’m being a crabby car salesman.”

[flv]http://www.phillipdampier.com/video/Crabby Verizon Salesman Forgets to Hang Up.mp4[/flv]

A public relations headache for Verizon Wireless as one of its “premium dealers” decides to dismiss promises of savings as “selling lies.” (Warning: Contains profanity.) (1:42)