Globalive in Talks to Buy Mobilicity?

by Jordan Richardson on December 21, 2011

Globalive Communications Corp., having reached the two-year mark in Canada’s long-suffering telecommunications sector, is apparently poised to make a big move. The company is purportedly in talks to purchase Mobilicity, a competitor and fellow Toronto-based telecommunications startup.

The report comes from Bloomberg News and cites that citadel of journalistic integrity, “a person familiar with the discussions,” as the lead source.

Spokespersons for both companies declined to comment, with Mobilicity president Stewart Lyons refusing to remark on what he described as “speculation.”

The source declined to be identified because the talks are “private,” noting that a deal could be “months away” but will transpire. Also in talks right now is an initial public offering from Mobilicity, said the source.

Word around the campfire is that the deal will have to wait until clarification of the foreign ownership restrictions.

WIND Mobile chairman Anthony Lacavera has said repeatedly (and recently) that his company would be a consolidator and the last new entrant standing. “There is going to be consolidation activity between new entrants,” said Lacavera in an interview with Network World Canada on Monday.

While it’s hard to say anything concrete about Globalive purchasing Mobilicity, the deal does make sense on a number of levels. One of the first considerations is that of the imminent spectrum auction, a land rush for exquisite 700 MHz (and maybe 2500 MHz) spectrum that could draw billions. With the pooled forces of Mobilicity and WIND Mobile bidding on the same team, the fused firm could theoretically score more of the good stuff.

There’s also the consideration that WIND and Mobilicity have a number of things in common. While WIND clearly has larger aspirations, both companies have service in Toronto, Ottawa, Calgary, Edmonton, and Alberta. And both companies use AWS band spectrum, which means that their frequencies could be combined.

Part of the trouble could be operational, with WIND Mobile using equipment from Alcatel-Lucent and Nokia Siemens while Mobilicity is running gear from LM Ericsson. This difficulty could certainly be solved by simply picking an equipment provider, however, so it need not make or break the prospect of a deal.

With Telus, Bell and Rogers sitting on 90 percent of the wireless market, the aroma of this would-be deal smells awfully sweet for those looking for more actual competition in Canada’s industry.

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