Mobilicity Reportedly Loses Funding for AWS-3 Spectrum Auction
Mobilicity may have lost its last chance to become an attractive business to any wireless players in and outside Canada: the moribund carrier has allegedly been left without the neccessary secured funds to bid for wireless airwave licenses, the Financial Post claims.
You may remember that Mobilicity announced its participation to the AWS-3 spectrum auction, and submitted the paperwork for bidding on the auction that kicked off on March 3rd. Industry Canada reviewed Mobilicity’s application, and published the final list of qualified bidders, which, by the way, includes DAVE Wireless Inc, the company behind Mobilicity.
We must note here, that in order to qualify for the auction, the participating company must submit a financial deposit. This equates to the opening bid for the licences on which the company intends to lease. Although these amounts are kept confidential, there were rumours of it being $62.5 million needed to secure the licences in the three areas Mobilicity and Wind Mobile operate.
In order to enhance the integrity of the auction, the Department will require that all bidders submit a pre-auction financial deposit with their application to participate in the auction.
Each participating bidder will be required to submit a financial deposit equal to the opening bid of the licence(s) on which it intends to bid. These amounts will be kept confidential.
The financial deposit must be in the form of a certified cheque, bank draft, money order, wire transfer, or an irrevocable standby letter of credit, payable to the Receiver General for Canada, drawn on a financial institution that is a member of the Canadian Payments Association. The elements required in a letter of credit, as well as a sample letter of credit acceptable to Industry Canada, will be provided as part of the application forms. Multiple letters of credit (or other forms of payment) from one or more financial institutions will be permitted within reason.
Since the list of qualified bidders includes Mobilicity, it contradicts the Financial Post’s report of the carrier losing the financing, simply because the government would have had to check whether the carrier has the financial power to obtain the licenses or not.
We don’t exclude the possibility of financial backers walking away from Mobilicity — for publicly unknown reasons — after the carrier obtained the qualified bidder position. If this is indeed the case, Wind Mobile is the clear winner of all necessary licences in the areas it operates in.