Canadian wireless operator Telus has abandoned plans to buy smaller challenger Mobilicity after the government blocked the transfer of the target’s spectrum licences last week.
In mid-May Telus and Mobilicity announced they had reached a C$380m…
Canadian wireless operator Telus has abandoned plans to buy smaller challenger Mobilicity after the government blocked the transfer of the target’s spectrum licences last week.
In mid-May Telus and Mobilicity announced they had reached a C$380m (US$374m) agreement to see the incumbent takeover the indebted new entrant.
However, Christian Paradis, Canada’s minister of industry, declared last week that AWS spectrum set aside for new entrants in the 2008 auction was not intended to be transferred to incumbents.
The sale of licences is subject to a five-year moratorium and Mobilicity’s expires next year. Paradis said that, in the future, proposed spectrum transfers that could result in reduced competition will not be allowed.
Mobilicity, which is in financial difficulty, is now pursuing a recapitalisation plan, which will be voted on by debt holders at a meeting on 25 June. The operator has 250,000 customers and 10MHz of AWS spectrum in a number of Canada’s major cities.
Canada’s government has said it wants four players in every region of the country, and Mobilicity has been talked about as part of a hypothetical consolidated fourth player alongside fellow competitors Wind Mobile and Public Mobile.
