Telus could be effectively blocked from Canada’s auction of 2.5 GHz licences scheduled for next year by the government due to its repeated attempts to acquire spectrum from Mobilicity, which filed for bankruptcy last September.
The government has…
Telus could be effectively blocked from Canada’s auction of 2.5 GHz licences scheduled for next year by the government due to its repeated attempts to acquire spectrum from Mobilicity, which filed for bankruptcy last September.
The government has already barred Telus – one of Canada’s big three operators – from acquiring Mobilicity twice and is now considering new measures to dissuade Telus from pursuing the minnow further, government sources told The Globe and Mail.
Earlier this month Telus made a third move for Mobilicity, offering C$350m for the regional operator. Mobilicity’s chief restructuring officer has said it is working with business ministry Industry Canada in an attempt to broker a deal, but the government is digging its heels in.
The country’s Conservative administration has committed to boosting competition in the mobile sector and wants four mobile operators offering services in all of Canada’s regions.
The spectrum Telus is trying to buy from Mobilicity was set-aside for new entrants in the 2008 auction. There was a five-year moratorium on the sale of the licences and since that has expired, the government has made it clear that those airwaves will not end up in the hand of the already-dominant telcos.
The government is reported to be unhappy at seeing Mobilicity’s AWS spectrum tied up in a legal battle when it could be in the hands of an upstart that could provide competition to the big three – Telus, Rogers and Bell.
The newspaper quoted a government source as saying that Telus would not be allowed to stockpile spectrum intended for a competitive fourth player and participate in spectrum auctions.
Industry Canada could redesign next year’s 2.5 GHz auction in favour of new entrants, which could effectively exclude Telus from the bidding process.
The tender is seen as particularly important for Telus as it does not have a significant amount of 2.5 GHz frequencies, whereas rivals Bell and Rogers are close to their caps. That leaves it as the only sizeable player which can acquire a significant amount of spectrum in the auction.
Industry Canada is also said to be considering completely changing how the spectrum is allocated and is looking at the possibility of a “beauty contest” method as it looks at how it can best achieve its policy objectives.
