Catalyst Capital Group Withdraws From 700 MHz Auction

by Istvan Fekete on December 5, 2013

The competition around the forthcoming wireless spectrum auction is slowly cooling down: Ottawa has lost yet another participant, according to a disclosure posted on Industry Canada’s website yesterday and spotted by the Globe and Mail.

After announcing its participation in the valuable 700 MHz spectrum auction, Catalyst Capital Group Inc., a major shareholder of the struggling Mobilicity, waited a couple of months before withdrawing its application. The reason is yet unknown, but it is worth noting here that the investment group did not register Mobilicity for the auction. Catalyst Capital Group has not commented on the move.

At first glance, this seems like a major blow to Ottawa’s push for more competition in Canada’s $20 billion wireless market.

Catalyst Capital Group owns a major share in Mobilicity, a struggling wireless startup that will be auctioned off on December 9, 2013. Wind Mobile has expressed interest in acquiring the carrier multiple times, and more recently announced that it would participate in the auction process. This could suggest that the biggest of all wireless startups launched after the 2008 wireless spectrum auction will bid on the company.

This could be great news for Catalyst, as Mobilicity has failed to find a buyer except Telus. The deal, however, was rejected by Ottawa, due to the wireless spectrum sale moratorium valid until next spring.

Five years after the 2008 wireless spectrum auction, the Canadian wireless landscape has begun to clear up: only one of the wireless startups, Wind Mobile, has managed to grow its user base above 600,000 subscribers. The other two, Mobilicity and Public Mobile, ended up in debt. And although Wind’s current situation is not much better, it does at least have potential, while the other two players have failed to meet the expectations of their backers. A Wind–Mobilicity merger would be interesting, though, and hopefully will happen, because this could change the whole wireless landscape in the country.

In the end, with Catalyst Capital out of the game, the 11 participants in the 700 MHz wireless spectrum auction are now professional players, not financial ventures.

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

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