Mobilicity plans aggressive bidding for spectrum

Wireless startup Mobilicity is looking at spending a lot of money next year.

Stewart Lyons, president of the Toronto-based carrier says it will be bidding “aggressively” in the upcoming 700 MHz spectrum auction, and expanding its network in the suburbs around Toronto by the end of the year.

“We’ve already seem some term sheets (from investors) to finance spectrum buys, so we plan on being there and bidding pretty aggressively,” he said in an interview.

“We need more spectrum to launch LTE, so the auction’s pretty important for us.”

In the 2008 spectrum auction, Mobilcity spent $243 million buying its first spectrum. In that auction carriers spent a total of $4.25 billion on spectrum. It isn’t known if the bidding will go that high for 700 Mhz spectrum. While the frequencies are considered more valuable than the AWS spectrum sold in 2008, Industry Canada has set out rules for the next auction that may tamp down bidding.

Lyons also said the federal government’s change allowing foreign investors to buy any carrier with less than 10 per cent of the national wireless market has gotten some attention.

“We’re getting some tire-kicking from some international players. I don’t think there’s anything serious yet, but we’re getting inquires and calls from folks we don’t usually get them from.”

There’s nothing particular holding them back from putting money in, he added. “The problem is this is the first look at Canada for all lot them. They’ve been scared off in the past by the [foreign investment] rules and the incumbents, and they’re getting accustomed to the changes.”

Mobilicity’s major investors are its executive chairman and Toronto entrepreneur John Bitove through his Obelysk holding company, and New York’s Quadrangle Capital Partners, which specializes in investing in communications and IT companies.

There’s been a cooling off of rumours a year ago that fellow startup Wind Mobile and Mobilicity were in acquisition talks. The two companies have networks in Toronto, Vancouver, Calgary, Edmonton and Ottawa. Public Mobile, which operates in Toronto Ottawa and Montreal, has sometimes been mentioned as well.

“We’ve been open to it (consolidation) for a long time,” Lyons said. “It would help the outlook for all three companies.”

But, he said, “you’ve got three disparate ownership groups, three different business plans and the usual stuff that you wouldn’t try and talk about three companies. Some of the companies fit together better than others.”

Lyons wouldn’t say how many subscribers Mobilicity has. A year ago it was estimated it had 250,000 users. Wind recently said it has gone over 500,000.

Lyons also said that Mobilicity will have extended its 4G HSPA-based network (download data speeds of up to 21 Mbps) to the Toronto suburbs of Pickering, Ajax, Whitby and Oshawa by September 2013, and to Milton, Oakville, Burlington and Hamilton/Stoney Creek by next December.

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