Canadian telecom provider Telus said it plans to acquire regional rival Mobilicity for $370 million, picking up the carrier’s approximately 250,000 customers. Telus is currently one of the “big three” Canadian operators that along with Rogers and Bell Canada dominate the country’s wireless market.
Mobilicity, which announced re-structuring plans last month, hinted that the move towards being acquired by a larger rival was necessary for its continued support of customers and 150 employees.
“A concern for our customers and employees led us to approach Telus, which has a reputation for a strong customer focus, as evidenced by their industry leading client loyalty,” said Mobilicity President Stewart Lyons. “I am confident Telus will look after our employees and our customers, mitigating any disruption to their service, while offering the best outcome for all stakeholders.”
Mobilicity chief restructuring officer William Aziz added: “Mobilicity has been losing a significant amount of money every month. The financial strength of Telus will allow the business to be continued in a way that will benefit customers and employees. An acquisition by Telus is the best alternative for Mobilicity.”
Mobilicity, which is owned by Data & Audio Visual Enterprises Wireless, noted that proceeds from the deal would be used to satisfy secured and unsecured debt.
The move also shows the continued challenges in front of Canadian telecom regulators that have been trying to infuse more competition into the country’s wireless market. Industry Canada had set aside some spectrum licensed in the country’s 2008 1.7/2.1 GHz auction for new entrants, though that has seen limited success as only a handful of carriers have entered the space, while others have sold off those spectrum holdings to established carriers. Mobilicity picked up 10 spectrum licenses covering 16 million potential customers.
Canada has re-jiggered rules for its upcoming auction of 700 MHz and 2.5 GHz spectrum in another attempt to attract new entrants. The 700 MHz auction is scheduled for Nov. 19, while the 2.5 GHz auction is set to take place next year.
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