Canada's Government Likely to Block Sale of Mobilicity to Larger Networks

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Canada's government has indicated that it would block any deal that saw one of the big three mobile networks buying the struggling smaller Mobilicity even after a ban on such a deal is due to expire next year.

Mobilicity is in court administered administration and seeking a buyer by the end of this year, but its radio spectrum cannot be transfered to another company until next February.

Mobilicity was one of the new entrants that was expected to shake-up the telecoms market, but struggled to compete against the big three networks. Its valuable radio spectrum was allocated with a five-year sales block, which expires next February.

Telus has attempted to buy the company before and is again pressuring to have the restriction relaxed to that it can buy the company before it possibly closes down.

However, rather than relaxing its stance, the government appears to be hardening its approach, and would block the deal, even if it takes place after the spectrum sale block is remove.

"We will not approve any spectrum transfer request that decreases competition in our wireless sector to the detriment of consumers," Jake Enwright, press secretary to Industry Minister James Moore told the Globe and Mail newspaper.

However, if the company folds due to the lack of viable buyers, then its customers are likely to end up switching to one of the big three networks anyway.

The regulatory uncertainty is also said to be worrying the other smaller networks who need to be able to reassure their investors that they can sell up if the companies need to.

On the web: Globe and Mail

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Tags: mobilicity  Canada 

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