Canada: TELUS' Spectrum License Transfer with Mobilicity denied

Today, the Conservative government's Industry Minister, Christian Paradis announced his intentions to deny the license transfer request from TELUS to purchase Mobilicity's AWS spectrum before the appointed due date.

The statement released this morning, the Minister said "Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents. We will not waive this condition of license and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit." During the 2008 spectrum auction, when the government raised $4.25 billion, it was codified that no spectrum set aside for new entrants - those that would eventually form WIND Mobile, Mobilicity and Public Mobile - would be transferable for five years. This approbation expires in early 2014, but Paradis implied that a spectrum transfer of this nature would be disallowed indefinitely.

This move, ostensibly to ensure a competitive wireless market remains in the country. The statement claims that "proposed spectrum transfers that result in undeue spectrum concentration-and therefore diminish competition-will not be permitted. This policy will apply to all commercial mobile spectrum licenses, including the 2008 AWS licenses."

The TELUS-Mobilicity deal appears to be dead, for now at least. There seems to be no value to the country's second-largest carrier in moving forward with the $380 million deal if the spectrum is not included. TELUS has issued this statement about the denied acquisition of Mobilicity:

"Today's decision is unfortunate for Mobilicity's 250,000 customers, 150 employees and debtholders, who now face considerable uncertainty due to the pressing financial challenges facing the company. TELUS will drive on with our proven strategy that has served us so successfully over the years. We will continue to focus on our sustained investment in wireless infrastructure, broadband data services and putting our customers first."

Source: Marketwire

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