Telus drops hunt for Mobilicity

Sober second thought. That’s what the Senate’s there for, or so we’re told. But you don’t always need a plush red chamber full of politicians to prompt a serious change of heart, especially when you’re being warned by the federal government to back down or else.

Vancouver-based Telus announced early in April that it was trying to acquire Mobilicity for $350 million, its third attempt at a buyout. That drew a warning from Ottawa, which had already forcefully opposed the previous attempts. Ottawa said later in April that if Telus didn’t abandonits latest attempt to acquire Mobilicity – and the frequencies earmarked for new wireless entrants – it would face serious penalties.

Telus has apparently now decided to abandon those plans after all.

According to an unnamed source in a Globe and Mail article on Wednesday, Telus told Mobilicity it was calling off its bid the day before, explaining that some conditions of the deal hadn’t been met.

The conditions weren’t specified, but one known condition of the buyout was that Ottawa would approve the transfer of spectrum from Mobilicity to Telus. Ottawa has been on record opposing this transfer.

The federal government has been engaged in a high-profile and expensive campaign to create more competition in the market, and viewed the buyout attempt by Telus as counterproductive.

In April Ottawa issued a warning – via the Globe and Mail – that if Telus persisted it would face damaging penalties. These would have included the rejigging of an April 2015 auction of 2500 Mhz frequencies to cut Telus out of the running.

When they issued their warning, federal authorities said that their warning to Telus was intended as a caution to Bell and Rogers, the other big incumbents, as well. To preserve and increase competition in the wireless market, Ottawa wants to make sure none of the big three acquire wireless spectrum allocated for new wireless entrants such as that held by Shaw Communications.

Andrew Brooks
Andrew Brooks
Andrew Brooks is managing editor of IT World Canada. He has been a technology journalist and editor for 20 years, including stints at Technology in Government, Computing Canada and other publications.

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