Mobilicity needs to source funding this week or miss AWS-3 auction

26 Jan 2015

Financially-stricken Canadian cellco Mobilicity has confirmed that it is still searching for funding to meet the deposit deadline of 30 January in order to participate in the upcoming AWS-3 mobile frequency auction in March, a report from Ernst & Young disclosed on Friday. Mobilicity, which is under court protection from its creditors, needs to secure a CAD62 million (USD50 million) refundable deposit by the end of the month to bid in the auction of unallocated 3G/4G spectrum in the regions where it already operates, Reuters reports. As a relatively recent entrant to Canada’s mobile sector, Mobilicity would get preferential bidding rights on the additional 1700MHz/2100MHz band frequencies, which would increase its attractiveness to a potential buyer.

The report added that Mobilicity is continuing talks on a possible takeover, having discussed selling itself with several parties, including one of its noteholders, whilst it has asked the court to extend its protection from creditors once again, to 8 May from a looming expiry date of 30 January. It was also disclosed that Mobilicity had 158,600 active subscribers at the end of 2014 – down from 175,000 twelve months earlier according to TeleGeography – while customer churn was 4.9% in December.

The Ernst & Young report also confirmed that Mobilicity does not plan to participate in Canada’s auction of 2500MHz-2600MHz 4G frequencies scheduled for April.

Canada, Mobilicity