Telus–Mobilicity Deal Demands Clear Rules for Buying New Players

by Istvan Fekete on May 21, 2013

Telus broke the news last week when it announced that it will acquire Mobilicity for $380 million, creating a precedent in the Canadian wireless market. This move, however, appears to be perfectly legal, despite at first glance being in conflict with Ottawa’s own rules.

For this reason, other wireless startups such as Wind Mobile have raised their voice and asked the government to make it clear whether it is going to uphold its own rules on the sale of Mobilicity.

Speaking with Ottawa Citizen Anthony Lacavera, the CEO of Wind Mobile said incumbents such as Rogers, Bell and Telus shouldn’t be allowed to use loopholes or make creative deals to get around the rules.

“The government can say either you can do deals like that or you can’t,” Lacavera said in an interview. “Rules are always open to some interpretation. So at a minimum, the government needs to be clear and decisive and fast with what they say.”

As Industry Minister Christian Paradis said, he will take his time and review the Telus–Mobilicity deal, but the question is how much time the process will take. Keeping in mind the June 11 deadline for submitting applications for the upcoming wireless spectrum, the future of the wireless startups pretty much depends on the Industry Minister’s decision on the sale of Mobilicity.

The wind of change is blowing in the Canadian wireless market. You may recall that Rogers and Shaw have reached an agreement in which the latter “optionally” gives the unused AWS wireless spectrum it acquired back in 2008 to Rogers, triggering an uproar in the mobile market.

There is also another move that could hint toward Ottawa relaxing its own rules: it allowed Wind Mobile to become the first fully foreign owned wireless player in the country. This move was later “explained” by Industry Minister Christian Paradis, who said that the mobile market needs foreign capital to support wireless competition.

Yet the government’s years-long effort to seeding wireless competition in the country seem to have reached a dead end, mostly because of the government’s awkward methods for helping wireless startups.

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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