Court OK's Telus' takeover of Mobilicity
An Ontario court has approved Telus's deal to take over cellphone rival Mobilicity, one of the final hurdles that was standing in the way of the $380-million deal.
Telus Corp. is trying to take over Mobilicity, which offers wireless services to more than 300,000 Canadians in Toronto, Ottawa, Calgary, Edmonton and Vancouver.
The deal has already been approved by Mobilicity's bondholders, which means final OK from Canada's Competition Bureau and Industry Minister Christian Paradis are all that remain in terms of regulatory hurdles.
The issue with that approval will be what happens to Mobilicity's spectrum licence, which is currently set to expire in 2014.
Mobilicity came to be after a government auction of new spectrum in 2009. Spectrum is the infrastructure on which wireless signals travel, and in 2009 the federal government released a new slice of spectrum with the expressed purpose of letting smaller companies start up to compete with the likes of Telus, Rogers and Bell.
Under the terms of that auction, the owners of the new spectrum were not allowed to sell their spectrum (and by extension, themselves) to an incumbent carrier for at least five years.
Telus argues Mobilicity isn't financially viable enough to stay in business until its spectrum licence expires and wants to be allowed to buy Mobilicity before the five-year expiry period.