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.