Wind interested in Mobilicity merger following Telus being blocked

Editor’s note: Story updated at 3:16 PM with new comments gathered by reporter Howard Solomon.

While Mobilicity says it is reviewing Industry Canada’s decision to prevent its acquisition by incumbent Calgary-based carrier Telus Corp., Wind Mobile has extended an olive branch to the beleaguered firm.

In an interview at Toronto’s Telecom Summit, Lacavera said Wind is interested in talking again to Mobilicity about a merger. They have talked before but got nowhere.

“I think this re-opens the opportunities of a conversation with Mobilicity stakeholders. We’ve long maintained that the combination, or co-operation or partnership, with that fellow new entrant makes a lot of sense in order for us to go up against the big guys so I think this does set the stage for that.”

There have been a variety of reasons it hasn’t worked, he said, including differences in shareholders and investors, and both carriers wanted to run for a while separately. But “some sort of partnership with Mobilicity makes sense.”

Asked if Wind has the $350 million Telus says it’s willing to pay for Mobilicity, Lacavera said he isn’t familiar with the terms of the deal.

“We’re in the process of reviewing what Industry Canada announced,” says Mobilicity President Stewart Lyons in an e-mailed statement. “We’ll be speaking with Telus and other stakeholders and will have more to say in due course.”

Industry Minister Christian Paradis said he will not approve Telus’ $380 million takeover of Mobilicity because it would see an incumbent gain ownership of wireless spectrum set aside to spur competition. That five-year moratorium that was set in the 2008 spectrum licence auction is nearly expired, but not quite.

Previously an Ontario Superior Court approved Telus’ acquisition plan of Data & Audio-Visual Enterprises Holdings Inc. (the parent company of Mobilicity). Mobilicity had said it is facing financial difficulties and could even go bankrupt if an acquisition deal does not go through.

Mobilicity’s acquisition would have meant another 250,000 paying subscribers for Telus and more spectrum to deliver its services with. In a statement, Telus described the decision as “unfortunate” and said Mobilicity’s consumers and debtholders “now face considerable uncertainty due to the pressing financial challgnes facing the company.”

All of the new entrants launched with the wireless spectrum licences won in 2008 are currently on the selling block, including Wind Mobile and Public Mobile. Other wireless spectrum licences, such as those won by Shaw and Videotron, have never been used to build out a network or sell wireless services.

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Jim Love, Chief Content Officer, IT World Canada

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Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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