Vecima subsidiary sells wireless spectrum for $14M
YourLink, a subsidiary of Vecima Networks, has entered into a definitive agreement to sell its Saskatchewan wireless spectrum to Inukshuk Wireless Partnership for $14 million.
The Saskatchewan 2.5-2.6 GHz spectrum represents 7.5 percent of the spectrum owned by YourLink. Inukshuk Wireless Partnership is a partnership of affiliates of Rogers Communications and Bell Canada.
Service providers in Canada are looking for additional spectrum as video usage on smartphones eats up the available mobile bandwidth.
The deal is subject to regulatory approvals, and Vecima said it would close in several phases as the approvals are granted.
YourLink said it will transition its Internet customers to alternate spectrum that it owns, which will "open up significantly higher capacity and bandwidth for those customers."
Subject to the regulatory approval process, the agreement gives YourLink continued use of the spectrum sold to Inukshuk for one year after the agreement date.
YourLink currently provides video and broadband Internet access to approximately 19,000 customers through digital wireless services in Saskatchewan and several small cable TV systems in rural British Columbia. Following the sale of the spectrum, YourLink will transition its wireless video customers in Saskatchewan to alternate service providers. Current revenue from video customers in Saskatchewan is only a minor part of YourLink wireless revenues.
"As we have said in multiple quarterly calls, Vecima believes that the market value of YourLink's total spectrum holdings before this sale is in the $35 to $50 million range. We are pleased that this agreement provides strong evidence of the significant value contained within Vecima's asset base built over 22 years of profitable operations. Further, the transition to other spectrum will allow us not only to introduce a new generation of our own advanced Internet radios, but also to expand service speed and bandwidth to our growing customer base," said Vecima President and CEO Surinder Kumar.