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.
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.