Bell Canada Buys Out Virgin Mobile MVNO

Bell Canada is buying out the 50% stake in Virgin Mobile Canada for CA$142 million (US$121 million), and entering into a long-term licensing agreement with the Virgin Group to retain the brandname rights. 

"Bell Mobility's acquisition of Virgin Mobile Canada supports our strategic imperative to Accelerate Wireless, a core component in Bell's overall strategy to achieve our goal: To be recognized by customers as Canada's leading communications company," said George Cope, President and CEO of Bell and BCE. "This initiative will allow Bell Mobility to be uniquely flexible in the competitive wireless marketplace, maximizing network, handset, distribution and global roaming efficiencies, and enhancing the growth of the No. 1 youth brand in Canadian wireless."

While Virgin Mobile Canada will continue to operate independently with distinct branding and its own distribution channels, both Virgin Mobile Canada and Bell Mobility expect to realize enhanced operational efficiencies from shared network infrastructure, handset acquisition and common distribution in high-traffic retail locations such as The Source.

On a per subscriber basis, the purchase price represents a lower cost of acquisition (COA) per subscriber than Bell Mobility's current COA average. The acquisition will have limited impact on Bell Wireless financials in 2009.

Under the terms of the licensing agreement, Bell Mobility retains long-term rights to the Virgin Mobile brand and the benefits associated with such a relationship with the Virgin Group. Virgin Mobile Canada was formed in 2004 as a MVNO jointly owned by Bell Mobility and the Virgin Group.

Posted to the site on 7th May 2009