Vidéotron Interested in Acquiring Mobilicity, Analyst Says


The Canadian mobile landscape has a tiny chance of changing: Vidéotron is reportedly eyeing the struggling wireless startup, Mobilicity, according to bank analysts (via the Globe and Mail). The negotiations went as far as a non-disclosure agreement signed by both parties ahead of the 700MHz auction that kicked off today.

Mobilicity closed 2013 one step away from bankruptcy and without announcing a buyer, despite the existence of multiple “qualified buyers.” At least this is what the revealed court documents tend to suggest. The only wireless player that publicly announced its participation in the bidding process was Wind Mobile. We don’t have information about the presence of incumbents, although Telus courted Mobilicity twice last year, but its offer was rejected as the government tried to send a clear signal to both wireless players and consumers: It won’t repeat its earlier mistakes and allow the transfer of set-aside spectrum to the Big Three. Ottawa also underscored its commitment to a competitive wireless market.

This shed positive light on a Wind Mobile-Mobilicity merger, but since Wind Mobile depends on foreign financing, the final word belongs to its backer. And considering the Netherlands-based VimpelCom’s move yesterday — it decided not to finance the carrier’s participation in the 700MHz auction — the chances of bidding on Mobilicity have weakened. So has the competition in the Canadian wireless market.

But there is still a tiny chance for Mobilicity: Vidéotron has indicated that it has some interest in licences outside of Quebec and signed an NDA with Mobilicity, Jeff Fan, a Bank of Nova Scotia analyst, wrote in a research note.

Vidéotron is the wireless arm of Quebecor, which spent hundreds of millions of dollars back in 2008 to acquire set-aside AWS spectrum. After securing its foothold in Quebec, it seems like the company is ready to move forward and secure licences outside of its area.