Has Mobilicity lost funding short of spectrum auction deadline?

The wireless industry has been gearing for a faceoff between independent carriers Wind Mobile and Mobilicity in the latest AWS-3 spectrum auction. However, recent reports have surfaced that Mobilicity’s efforts to secure funding for its bid may have fallen through at the last minute.

Mobilicity, which has been under creditor protection since September 2013, failed to get emergency funding it was seeking “just minutes” before Industry Canada’s March 3 deadline for Internet providers to submit their bids, according to the Financial Post.

Mobilicity would not confirm nor deny the report. “Spectrum auction rules are very strict and we are not allowed to issue comments about the auction until the result announcements on Friday,” Nick Anstett, client partner at Longview Communications, public relations firm for Mobilicity, told ITWorldCanada.

Applicants are forbidden by Industry Canada from commenting about bidding strategies until the winners are announced. Possible penalties include disqualification and/or forfeiture of the deposit paid to Ottawa to take part in the auction.

Nine existing mobile carriers, including Rogers Communications, Bell Mobility, Telus have put in $65 million each in entry deposit for the auction of spectrum licenses for Advanced Wireless Service in bands 1755-1780 MHz and 2155-2180 MHz (AWS-3).

A large block of the AWS-3 spectrum (more than half or 30 megahertz out of 50 megahertz total) is set aside for operating new entrants – those that own less than 10 per cent of national market share and 20 per cent of regional market share.

This provision is part of a set of new rules meant to favour smaller wireless providers and level the playing field.

The auction has been seen as sort of a contest between Wind and Mobilicity because under the rules they are the only two companies allowed to bid on that set aside block of spectrum in Southern Ontario.

However the Financial Post said it has confirmed that while Mobilicity received approval from an Ontario court for as much as $200 million in additional funding from one of its creditors before the deadline for bid submissions, the transaction for the financing was scuttled.

Nestor E. Arellano
Nestor E. Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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