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Public Mobile gambled in 2008 when it bought slices of spectrum in Ontario and Quebec few wanted because there weren’t many cellphones that could use the frequencies.

But while the startup carrier found equipment makers willing to make handsets with those frequencies and managed to sign 280,000 customers it struggled to make money and was forced to sell itself to Telus.

Now Telus has told subscribers that the Public Mobile network will be closed and they can move to the company’s faster network, which is better suited for smart phones — but they’ll have to buy new handsets. Telus is offering discounts, but the Globe and Mail reports there are complaints.

The complaints come in part because Public Mobile focused on selling to people who couldn’t afford — or didn’t want to buy– expensive handsets and therefore may find it hard to come up with cash for a new one.

The frequencies the startup bought is in what is called the G-block of the PCS spectrum. PCS spectrum is where Bell, Rogers and Telus got their start early in the cellular business. The G-block was sold during the 2008 spectrum auction when attention — and money — was more focused on the AWS spectrum, which has better propagation characteristics. For example, Bell, Rogers and Telus are using their AWS spectrum to run their fastest LTE services. PCS spectrum isn’t efficient enough to handle that.

For that reason Ottawa didn’t place any restrictions on G-block winners selling their spectrum to an incumbent carrier. Because the AWS spectrum is so valuable — winning bidders spent over $4 billion buying it up — the federal government placed a five year ban on new carriers like Videotron, Eastlink, Wind Mobile and Mobilicity turning it over to incumbents.

That ban has started to run out for financially-troubled Mobilicity, which is in court trying to stave off creditors and hoping the government will allow it to be bought by Telus. So far that hope has been in vain.

 

 

 

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