Winnipeg Free Press - PRINT EDITION

Telus urges breaking the rules to acquire small Mobilicity

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MONTREAL -- Industry Canada may let its current rules apply when it comes to the sale of Mobilicity to avoid having the struggling carrier swallowed up by Telus, some telecom analysts predicted on Monday.

Ottawa could also extend the five-year period that prevents the early transfer of Mobilicity's licence for spectrum, radio waves over which cellphone networks operate, to a big wireless carrier, analysts said.

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"The government is looking at this restriction as a way of ensuring that competition exists," said Iain Grant, executive director of SeaBoard Group.

Mobilicity, as well as Wind Mobile, bought spectrum that was set aside for new players to bid on in order to bring more competition to the cellphone market.

As a result, their licences can't be sold and transferred to any of the big carriers until next year. However, Telus has urged the deal be approved because Mobility is in dire financial straits.

Mobilicity has said the acquisition by Telus would provide continuing service for its 250,000 customers and jobs for its 150 employees.

Industry Minister Christian Paradis has said he will take whatever time is necessary to review the acquisition carefully.

Grant said he doesn't expect a fast decision and the June 11 deadline for bidders to hand in their applications for the 700-megahertz spectrum auction may pass.

"When a government says it's going to take its time that would be the very opposite of urgency," he said.

Debtholders of Mobilicity have approved the plan to sell the company to Telus Corp. The company is to seek court approval today.

Analyst Eamon Hoey said Industry Canada should uphold its rules on the transfer of licences for new players such as Mobilicity.

"Why should we break principles that were well established just so that we can bail out debtholders?" asked Hoey, of Hoey Associates Management Consultants Inc.

Both Grant and Hoey said other buyers could emerge for Mobilicity if Telus's bid fails. Grant cited Accelero Capital Holdings, co-founded by Egyptian telecom player Naguib Sawiris, and its purchase of Allstream, the business division of Manitoba Telecom Services.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition May 28, 2013 B5

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