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Telus blocked from buying Mobilicity; 700MHz auction delayed to January

5 Jun 2013

The proposed takeover of struggling Canadian cellco Mobilicity by larger rival Telus has been effectively blocked by a decision from Industry Minister Christian Paradis, who yesterday announced that the federal government would stick by its existing policy of not allowing the transfer of wireless spectrum from new market entrants to nationwide incumbent operators until 2014 at the earliest. Paradis confirmed to reporters in Ottawa that the pro-competition policy, which aims to see at least four network operators in every region via the licences issued in Canada’s 2008 AWS auction and upcoming 4G licence bidding, will not be altered – despite Telus and Mobilicity claiming that their proposed deal would save the smaller company from bankruptcy.

The minister stated: ‘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 licence and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit. Our government will continue to allow wireless providers access to the spectrum they need to compete and improve services to Canadians. We are seeing Canadian consumers benefit from our policies and we will not allow the sector to move backwards. I will not hesitate to use any and every tool at my disposal to support greater competition in the market.’ Furthermore, going forward Paradis added that ‘all applications for licence transfers will be reviewed on a case-by-case basis,’ under a strict policy which aims to block any transactions which would lead to ‘undue spectrum concentration.’

Simultaneously, and in a related move, Industry Canada revealed that the target date for the upcoming 4G 700MHz licence auction has been moved backward, in order to ‘provide companies with additional time to consider today’s decisions [relating to spectrum transfer policy] and finalise their approaches to the auction process.’ An application deadline for bidders had been due to expire next week (11 June), but is now set for 17 September, while the starting date for the auction previously slated for November 2013 has been pushed back to 14 January 2014.

Canada, Innovation, Science & Economic Development Canada, Mobilicity, Telus Corporation, Telus Mobility (old)

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