A Kobayashi Maru scenario

A report in the Globe and Mail has people speculating on the possibility of Xplornet taking over Freedom Mobile as part of the process to get the Rogers-Shaw transaction approved.

If the report is accurate, it might bring an interesting and fresh approach to Canada’s wireless marketplace and one that brings benefits to rural Canadians as well.

Let’s keep in mind that from the outset, Shaw has said that it was unwilling to continue to make the necessary investments in Freedom Mobile to keep the business current. Shaw acquired Freedom after the business failed under its previous ownership.

One might ask why any acquirer would expect a different result, if it plans to continue to operate a status quo business model? Simply operating as a low-price urban mobile provider has not proven to be sustainable. There is no reason to expect different results by applying the same approach as we have seen from the original incarnations of WIND Mobile, Mobilicity, or Public Mobile.

With Xplornet, one might envision how substantially enhanced spectrum holdings could benefit the company’s rural broadband business, unlocking hundreds of millions of dollars of value from spectrum assets that are currently being squandered by Freedom. In and of itself, that would improve the financials for the Freedom Mobile business, as well as Xplornet’s core fixed broadband business, enabling more rural customers to be transitioned off satellite-based services.

Noting that Xplornet has already deployed 5G already for fixed wireless, one would expect substantial improvement in the quality of service offered to rural broadband customers, as well as the ability to dramatically extend the reach of broadband, meeting and exceeding the national service objective.

Such a deal would also improves the position of Xplore Mobile operating in Manitoba, allowing the business to be integrated with Freedom’s operations in British Columbia, Alberta and Ontario.

In Star Trek II: The Wrath of Khan, then cadet James Kirk faced with an no-win scenario in a Star Fleet academy simulation. He found a way around the test by reprogramming the system, thus changing the conditions of the contest. In doing so, Kirk defeated the Kobayashi Maru scenario, and went on to fame as a Starfleet captain. Doing the same thing over and over again and expecting different results isn’t a sustainable approach.

The speculation of a deal with Xplornet changes the conditions of the fourth carrier marketplace. It is an interesting approach to disrupt the status quo.

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