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Mobilicity Plans Transfer of 200K Users to WIND Mobile as Bankruptcy Looms [u]

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The National Post reports cash-strapped wireless entrant Mobilicity (which has over $500 million in debt) is closing a deal where it will transfer its 200,000 users to rival WIND Mobile for “little-to-no compensation”:

The National Post has learned the Toronto-area carrier, formally known as Data & Audio-Visual Enterprises (DAVE) Wireless, hopes to shut down its money-losing consumer operations by the end of the month. Two separate industry sources said the agreement, which is still being negotiated, would see Toronto-based Wind assume Mobilicity’s customers for little-to-no financial compensation. Investors who hold Mobilicity’s debt would retain the carrier’s spectrum licences and its tax losses in the hopes of selling those assets down the road to a separate buyer.

The move is to allow Mobilicity users continuation of service as the latter’s investors hope to retain the company’s valuable spectrum assets and hope for a sale down the road. The company’s biggest expenses is monthly payments to Sweden-based Ericsson AB, who built their network and is currently running it.

Earlier this year Ottawa nixed a TELUS deal to acquire Mobilicity for $380 million, citing wireless entrant spectrum was “not intended to be transferred to incumbents.” During the noise of Verizon coming to Canada, Mobilicity’s shareholders welcomed a possible deal, but eventually the former delayed its rumoured plans to acquire the latter and ditched its Canadian plans entirely.

Just yesterday, WIND Mobile CEO Anthony Lacavera stated the company was ready and poised to jump into the fourth national wireless carrier position, depending on how the upcoming 700MHz wireless spectrum auction pans out for the company.

Any Mobilicity users out there ready to be adopted by WIND Mobile?

Update: Mobilicity has told The Canadian Press the above story is false (thanks Oshawapilot)

Financially struggling Mobilicity says it’s not going to transfer its cellphone customers to rival carrier Wind Mobile.

Mobilicity’s chief restructuring officer Bill Aziz says the published report about the subscriber deal with Wind Mobile isn’t true.

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  • Anything that keeps 200,000 customers out of the hands of the incumbents is a great deal so far as Competition is concerned.

  • MleB1

    I agree with your sentiment, but wonder how far behind Wind is as far as bankruptcy is concerned without something resembling a true national service. Their CEO might just be blowing a whole lot of hyperbole when he talks about Wind becoming the fourth carrier. Currently Wind isn’t much better off than old Clearnet (remember them?) or the more established provincially or city-owned wireless companies – with even less of a reputation.

    Offering competitive prices is only really competitive when you are.

  • Al

    The other thing that bothers me about Wind is that, on their website, they don’t make it readily apparent exactly how, where or even “if” you are covered by their unlimited plan. You have to really dig for that info. Plus their coverage map is kind-of confusing, and their “Extended…” map and explanation as to how it works is even more confusing – not to mention being out of date.

    And since when is $1/MB a good deal??? Holy crap that’s expensive!

    If they want to be the next big carrier, they also need to get their shit together.

  • It’s a moot issue now – Mobilicity confirmed an hour or two ago that there’s no truth to this story and no transfer is planned, nor shutdown imminent.

  • Thanks, updated!

  • Canucks

    Being the next big carrier is kind of a dream at the moment, they need to increase price on their plans first to stay alive.

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