BlackBerry Ltd To Gain From Government-Vodafone Deal

BlackBerry Ltd To Gain From Government-Vodafone Deal
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) appears to be heading towards success, and fortune seems to favor the company now. European telecom giant Vodafone will receive financial assistance of $850 million from Export Development Canada, and BlackBerry will get a major boost from this. A five-year loan agreement has been struck between the EDC and the telecom company, which includes a commitment of $750 million to purchase BlackBerry’s handsets, software and support services.

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BlackBerry gains from the deal

BlackBerry stands to gain majorly from the deal, as is evident from a statement given by EDC spokesman Phil Taylor in an interview on Tuesday.

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“It’s right across the board, so they’ll be buying everything from BlackBerry,” he said

International companies get financing from EDC for the promotion of Canadian goods and services and other international relationships. Taylor said the loan to Vodafone includes $100 million for helping it achieve “corporate purposes.” One of those purposes is to make business connections with Canadian supply chain companies in regions where it seeks to grow its business.

This is the second time Vodafone has received a loan from EDC. The first loan was for $750 million, which was repaid by the London-based telecom provider recently. Vodafone and BlackBerry have been long-time partners, and the carrier has been carrying its devices since the time the Canadian firm rose to fame in the early 2000s. Vodafone currently has a presence in 26 countries with 438 million mobile customers. EDC had offered Telefonica, a Spanish telecom company, a loan of 200 million euros last year to buy BlackBerry phones and services.

To help Chen’s efforts

BlackBerry CEO John Chen will surely get a boost in confidence with the provision of the loan to Vodafone as he tries his best to turn around the company. The Canadian company has been left far behind in the smartphone race with rivals like Apple Inc. (NASDAQ:AAPL), Samsung and others acquiring a larger market share. Last month, an announcement was made by BlackBerry saying that it will make its mobile security technology available for the Android operating system next year in partnership with Samsung. With the help of Rogers in Canada and Vodafone in the U.K., the company will make available its security offerings more broadly.

BlackBerry is nearing the launch of its much-anticipated device the Classic, which comes with a trackpad that has been updated for fans of the older similar model. On Friday, the Waterloo-based company will be reporting financial results for the third quarter of fiscal 2014.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at
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  1. Now this makes me VERY happy as a tax paying Canadian, Canadian Citizen, Canadian who loves innovative technology companies, advocate for Blackberry’s Amazing technology and someone who hates with all of their heart Google and Apple. The fact that Canada is subsidizing a publicly traded company (BBRY) may make a capitalist American’s stomach turn is an issue of ideology. The US tax system has a number of holes for corporations to avoid paying taxes while doing business in the USA. In Canada, our companies are at a disadvantage in this respect. Our regulation and taxation systems are way more restrictive then in the USA. They level the playing field for Canadian companies to the point that international companies like Google and Apple are able to compete with an unfair advantage. Both Apple and Google have HUGE cash reserves from their growth by saving billions through avoiding taxes over the years as their business grew. Blackberry on the other hand had to play by Canadian laws….well…NOW those laws and systems that are funded by those laws will benefit Blackberry as they should. For all those people who abandoned this Canadian company for an iPhone or Android device, SHAME on you…but thank you to the Canadian government (your) for returning some of the taxes Blackberry paid over the years back to them to help them regain foreign market share. Blackberry has also offered a trade in offer for iPhone users… The world is full of Blackberrys :)

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