Indebted Canadian operator Mobilicity now has until 20 December to restructure or find a buyer after a court decided to extend its creditor protection beyond 30 October.
At the beginning of the month, Mobilicity received protection from an Ontario…
Indebted Canadian operator Mobilicity now has until 20 December to restructure or find a buyer after a court decided to extend its creditor protection beyond 30 October.
At the beginning of the month, Mobilicity received protection from an Ontario court so that an anonymous buyer – rumoured to be Telus – could complete a rescue.
Canada’s industry ministry has been analysing the proposed deal to decide whether or not it will permit the transference of Mobilicity’s spectrum licences to the unnamed buyer.
Earlier this year the ministry blocked Telus’ attempt to acquire Mobilicity for C$380m (US$374m). Mobilicity’s AWS spectrum was acquired in 2008 and cannot be transferred to an incumbent operator such as Telus, unless Industry Canada approves it.
The Stephen Harper-led government has been committed to promoting competition through the creation of a strong fourth player and was reported to have courted US giant Verizon Communications so that it would enter the country. Yet no foreign bidder or significant new investor has come forward to invest in Canada, nor have they registered to participate in the upcoming 700 MHz auction scheduled for January.
If, as local reports suggest, Telus is Mobilicity’s current suitor, Industry Canada could take a different stance now that circumstances have changed.
On Wednesday the ministry gave Telus the green light to acquire Public Mobile, a wireless operator similar in size to Mobilicity but with different spectrum. Industry minister James Moore allowed that transaction because he said Public’s frequencies were “not used for the latest data plans and smartphones in Canada and [are] of a significantly lesser value than other types of spectrum”.
Moore reaffirmed that the moratorium on the transfer of set-aside AWS spectrum – which Mobilicity owns – to incumbent operators remained in place.
That ban ends in February 2014. But following a policy shift in June, Industry Canada now reviews all transfers of spectrum licences and can block transactions which could result in “undue spectrum concentration”.
Mobilicity, also known as Data & Audio-Visual Enterprises Holdings, is currently being protected under the Companies’ Creditors Arrangement Act. Ernst & Young has been appointed by the court to assist the mobile operator and its stakeholders.
President to leave at end of month
Meanwhile Mobilicity’s president Stewart Lyons is leaving the privately-held operator at the end of the month. No reason was given for his departure.
Anthony Booth, Mobilicity’s chief customer officer, will become the interim president until a permanent replacement is appointed.
