Mobilicity requests seventh creditor protection extension

22 Sep 2014

Financially-stricken Canadian cellco Mobilicity has requested an extension to its court-sanctioned creditor protection for a seventh time to allow it to continue looking for a buyer. The Globe & Mail reports that Mobilicity – which has been under creditor protection for nearly a year – on Thursday requested an extension to the ‘stay’ period protecting it from legal action from 26 September to 1 December which will be heard by the Ontario Superior Court of Justice this Wednesday. Chief restructuring officer William Aziz said that Mobilicity needs more time to review alternative options, noting that since the last extension was granted in June, significant market events have occurred – including Ottawa’s confirmation that it will hold a spectrum auction early next year with rules designed to favour existing newer entrants including Mobilicity, plus the launch of a lawsuit against the federal government by Mobilicity’s main investors alleging that Ottawa breached promises it made when it encouraged them to invest in the wireless industry.

Additionally, Aziz disclosed that Mobilicity has implemented cost cutting measures including shutting down certain cell sites that were ‘either redundant or carried very little traffic,’ claiming that this action would have little effect on customers. Furthermore, going forward Mobilicity will offer pre-paid services only – having said that most of its customers are already on pre-paid plans. Other steps taken to cut costs have included closing its Vancouver sales office and outsourcing some marketing functions. The executive also noted that Mobilicity achieved a net increase of 1,697 customers during August, while revenue and cash-flow was higher than previously projected. Mobilicity’s subscriber total was reported at 155,000 at end-June, down by a net 10,000 quarter-on-quarter and having fallen from 222,000 a year earlier.

Canada, Mobilicity