Canadian government not interested in Mobilicity ending up in Big Three hands


The Canadian federal government recently blocked TELUS from acquiring beleaguered carrier Mobilicity over concerns about “undue spectrum concentration,” especially in urban markets. The Globe and Mail has learned that it has gone further than that and privately signaled to all three incumbent carriers (Bell, Rogers and TELUS) that it will continue to oppose such a sale.

Canada’s 2008 wireless spectrum auction came with conditions that new entrants could not sell the spectrum they bought to Canada’s incumbent carriers for five years. Mobilicity’s spectrum transfer moratorium will expire in February 2014 but the Canadian government has already indicated that it will continue to block such transfers. Jake Enwright, press secretary to Industry Minister James Moore, explained that “We will not approve any spectrum transfer request that decreases competition in our wireless sector to the detriment of consumers.”

Aside from the two blocked attempts by TELUS to acquire Mobilicity, including one that would defer any spectrum transfer to the end of the moratorium, no other interested parties have stepped in with offers. With creditor protection running out later this month, Mobilicity last week put itself up for auction. Final bids are due on December 9. WIND Mobile is the only company to confirm its interest in the auction to date but it remains to be seen if it will submit a bid.

Should its auction fail (it is looking for at least CA$350 million), Mobilicity is reportedly set to ask the courts to force a sale to TELUS. Industry Canada could also allow Mobilicity to sell spectrum it holds in Red Deer, Alberta and Windsor, Ontario but this appear to be no more than a short-term solution.

Source : The Globe and Mail