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Rogers & TELUS Bidding On Mobilicity With Gov Blessing?

June 21, 2015 - Written By Cory McNutt

Mobilicity is in the news once again and according to The Globe and Mail, it looks like Rogers and TELUS may be in the process of bidding on Mobilicity for around $300 million – and that they actually have the government’s blessing this time around.  Mobilicity, as you may know has been under court-ordered protection since 2013, and the courts continue to reissue them protection, allowing them time to find a prospective buyer. Mobilicity even made arrangements to participate in the last AWS-3 spectrum, but then the decision was made not to participate and WIND Mobile was the big winner in getting the spectrum…although they need money now to build out their LTE network.

TELUS had already made a bid to purchase Mobilicity that was turned down by the government in December 2014 when Industry Minister James Moore said, “Our policy has always been clear – we will not approve spectrum transfer requests that decrease competition in the wireless sector.”  TELUS made repeated efforts to buy failing Mobilicity and the judge wrote, “The most that can be said is that TELUS made a business gamble and lost.  It’s not the Minister’s fault.”  TELUS only wanted Mobilicity for its spectrum and showed little interest in their actual business or customers – hence the government did not believe it was a good business decision for Canada as a whole, so they blocked it.

Under this new proposal, either Rogers or TELUS would purchase Mobilicity’s 157,000 customers and under 50 employees, AND transfer their Ontario-based AWS-3 spectrum to WIND Mobile.  The buyer would retain the balance of spectrum from Alberta and British Columbia.  Industrial Canada made be softening their stance as long as the proper deal is worked out.  The Globe reports that they have obtained letters from Industry Canada explaining that the spectrum owned by Mobilicity is highly valuable and if a portion is integrated into WIND’s network it would be “for the benefit of all Canadians.” Canada’s government’s main concern has always been to increase competitiveness, and by granting WIND Mobile this ‘prize’ it will allow them to build out their network with the newer LTE technology.  There were no details as to how far along the deal is, but the winner will acquire all of Mobilicity’s shares, customers, assets and debt.