TORONTO – Amidst reports that Rogers and Telus are battling to acquire Mobilicity, the owners and employees of the struggling wireless provider said Monday that have made an offer to Industry Canada and the federal government to acquire Mobilicity’s current subscribers, dealers, and partial infrastructure by setting up a Mobile Virtual Network Operator (MVNO) relationship with any potential acquirer.
Obelysk Inc., the holding company of Mobilicity founder John Bitove, issued a statement saying that it wants to maintain the Mobilicity brand in Toronto, Vancouver, Edmonton, Calgary and Ottawa where it currently operates, retain its 155,000 subscribers and current dealer network of over 150 points of distribution, as well as the 100 employees in its two call centres and 30 other full time employees.
Capital funding for the transaction would be provided by Obelysk Inc., though no price tag was included.
"Mobilicity has weathered many storms and yet is still in business today”, reads the statement. “We owe it to the customers, dealers, contractors and employees to stay in business going forward and not face uncertain demise like Public Mobile or other past wireless operators in Canada. The Big 3 telecoms want Mobilicity spectrum and this Group is not objecting to that sale. Continuing to bring competition and multiple options to wireless Canadian consumers going forward is our collective goal."
The Globe and Mail said Friday (subscription required) that Rogers and Telus were each bidding more than $300 million to acquire Mobilicity. The report added that opinion letters from Industry Canada related to the proposed transactions indicated that any deal would be contingent upon the successful incumbent transferring some of Mobilicity’s AWS spectrum in Ontario to Wind Mobile.
Mobilicity has been under court-ordered creditor protection since September 2013. As Cartt.ca has reported, Telus has tried three times to buy Mobilicity, but its efforts have been thwarted by the federal government.
If a deal comes to pass, Canaccord Genuity suggested that a consolidation of new entrants could be beneficial to the incumbents.
“We suspect that this may well be the exit strategy for Wind Mobile, as well”, wrote research analyst Aravinda Galappatthige, in a note Monday. “While we may be a fair distance away from such a scenario, as demonstrated in our 4th-player financial analysis… for us, the economic viability of the project is difficult to construct. In such a backdrop, at least one route for the investors involved could be to wait out the Government’s resolve. In the meantime, given this potential precedent we wonder whether the incumbents would eventually be able to purchase AWS-1 spectrum from Shaw and from Videotron outside of Quebec.”
– Lesley Hunter
