TELUS to be excluded from 2500MHz spectrum auction over Mobilicity acquisition attempts?

TELUSMobilicity, the beleaguered Canadian carrier looking to sell itself, last week announced that it had found a buyer through an auction it ran in December 2013. It turned out that the knight in shining armour was none other than TELUS which had already tried to buy it out twice before. Both previous attempts had been rebuffed by Industry Canada over concerns about “undue concentration” of spectrum licenses initially allotted to new entrants. It now appears that this third attempt by TELUS has ired the Canadian government to the point where it has threatened to exclude it from the next spectrum auction if it does not stop looking to acquire Mobilicity.

According to an unnamed senior government source, “If Telus doesn’t drop efforts to acquire spectrum set aside for new entrants, the Harper government is prepared to change the rules of the upcoming wireless auction that could effectively bar Telus or any incumbent from acquiring that spectrum.” Another source added, “If companies like Telus think the government will allow them to stockpile spectrum that was set aside for a fourth player, and access new spectrum in future spectrum auctions, they are kidding themselves.”

Industry Minister James Moore is expected to make an announcement about the latest TELUS bid for Mobilicity in the near future. Sources have told The Globe and Mail that the deal will be rejected. Should the deal be rejected, TELUS could well take its battle to court, effectively tying up Mobilicity’s spectrum licenses for years. To prevent that, it is considering barring TELUS from the next spectrum auction.

Canada’s 2500MHz spectrum auction is set to start in April 2015. With both Bell and Rogers already near their caps for spectrum in many regions, the auction could be an opportunity for TELUS to acquire significant new spectrum. If the Canadian government changes the rules, TELUS could lose out on this opportunity.

It’s clear that the Canadian government has not given up on its plan to “support more choice in our wireless market while putting the interests of consumers first.”

Source : The Globe and Mail