Bell today announced the $142-million acquisition by Bell Mobility of the 50% stake in Virgin Mobile Canada not already owned by Bell, along with an exclusive, long-term licensing agreement with the Virgin Group for continued use of the Virgin Mobile brand in Canada.
"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."
Sir Richard Branson, Chairman of The Virgin Group, said: "Bell has been an ideal partner for Virgin since 2004. I believe the acquisition of Virgin Mobile Canada and continuing licence of the Virgin Mobile brand to Bell will help to expand the Mobile business more quickly and allow even more Canadians to enjoy the unique wireless service and product experience Virgin created. We look forward to supporting Bell's expansion through our ongoing efforts to build the Virgin brand in Canada with entertainment businesses such as Virgin Festival and Virgin Radio."
While Virgin Mobile Canada will continue to operate independently with distinct branding and its own distribution channels, both Virgin Mobile Canada and Bell Mobility will realize enhanced operational efficiencies from shared network infrastructure, handset acquisition and common distribution in high-traffic retail locations such as The Source.
"Today's announcement is an excellent complement to Bell's pending acquisition of national consumer electronics retailer The Source and the rollout of our new third-generation (3G) HSPA wireless network, which will be completed by early 2010 and offer new handset options and extensive global roaming for Bell Mobility clients and Virgin Mobile customers here and around the world," said Wade Oosterman, President of Bell Mobility and Chief Brand Officer for Bell.
On a per subscriber basis, the all-cash $142 million 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 Mobile Virtual Network Operator (MVNO) jointly owned by Bell Mobility and the Virgin Group. As the No. 1 mobile youth network, Virgin Mobile Canada offers both prepaid and postpaid wireless service options and has been awarded the highest customer satisfaction ratings by J.D. Power and Associates for four years in a row. For more information on Virgin Mobile Canada, please visit virginmobile.ca