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Government Rejects Telus–Mobilicity Deal

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Citing its commitment to a competitive marketplace and consumer choice, Ottawa has rejected the Telus–Mobilicity deal, right after the CRTC announced the anticipated Wireless Code.

christian paradis

“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,” said Minister Paradis. “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.”

This means the Rogers–Shaw deal and the Rogers–Videotron deal will fail as well, as Paradis said he will approve neither the Telus–Mobilicity deal, nor any other transaction that results in a wireless spectrum set aside for new entrants during the last spectrum auction at least until the 5-year moratorium on licenses is up. That’s next year.

Paradis’ announcement reinforces the government’s effort to maintain a competitive market. On the other side, there are the players — the struggling wireless startups who are going to go bankrupt (at least Mobilicity and Public Mobile shortly afterwards) if they don’t receive an injection of capital.

If the government is indeed committed to a competitive market, then it could return the auction proceeds to new entrants for the AWS spectrum they put money down for back in 2008, as previously requested by Mobilicity. The $243 million spent on AWS licences could buy enough time for the wireless startups to get things right.

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  • FragilityG4

    Good.

  • Chrome262

    Good indeed, but I don’t see the government giving back the money from the auctions. But who knows.

  • crosseyed_mofo

    why would this have an affect on the rogers/videotron deal? that is a network partnership (like bell and telus), not a takeover/acquisition

  • IstvanFekete

    In addition to the network sharing agreement, Videotron and Rogers have also come to an agreement regarding Videotron’s unused AWS spectrum in the Greater Toronto Area. Videotron will have the option to transfer its Torontospectrum licence to Rogers, subject to regulatory approvals, beginning January 1, 2014 for a price of $180 million.

  • 1His_Nibs1

    Although I’m sure a lot of, if not all of the employees, customers & shareholders are none to pleased about this….I applaud Ottawa for sticking to their word in trying to make our wireless industry more competitive by preventing Telus from gobbling up another “small fish” a la Rogers/Microcell. Hopefully now Mobilicity will now try a little harder in searching for a buyer that isn’t one of the Big 3. I’m also hoping this sends a message to the other 2 (Rogers & Bell) that WIND is off limits to them as well.

  • crosseyed_mofo

    okay so itll affect the spectrum transfer but not the shared network then

  • IstvanFekete

    yes

  • Anthony W

    I am frustrated to see comment like this.

    What’s good about this? Mobilicity will fall and people will be out of jobs. If Telus takes over Mobilicity, at least it saves hundreds if not thousands of jobs.

    Government won’t be giving the money back. If the government allows this to happen then it opens the door for others to do the same thing.

    Where do you think the government gets the money from in the end to support Mobilicity? We, the tax payers, are the ones who carry all these craps again!

  • FragilityG4

    As many have said already, bankruptcy is not Mobilicity’s only option. They can find other investors. If you want to continue to live in a country where all our wireless options are controlled by three companies that’s your opinion and you are entitled to that. With that being said I do not what to live in that world and much like other Canadians I prefer more options and less oligopolies.

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