The federal government has announced it will not approve Telus’ application to transfer radio frequency licences from wireless carrier Mobilicity, thereby killing a $380 million acquisition deal between the two companies.
"Our government is clearly committed to encouraging competition in the wireless market so that Canadian families will benefit from cutting-edge technologies and services at affordable prices," said Christian Paradis, minister of industry. "I believe the basis of a strong economy is a competitive marketplace and consumer choice.”
Mobilicity, a smaller and newer entrant into the wireless business, was given its spectrum licences in 2008 in a special auction designed to introduce more competition to the market. Under the terms of that auction, restrictions were placed on licence transfers.
The government will also change its policy on spectrum licences, and will not allow transfers that concentrate too many licences in the hands of one carrier.
"Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents … We are seeing Canadian consumers benefit from our policies and we will not allow the sector to move backwards,” said Paradis.
At the time the deal was announced on May 16, Mobilicity’s chief restructuring officer, William Aziz, said that the company had been losing a significant amount of money every month, and that the acquisition was the best option for the company.
