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Rogers Announces Mobilicity Purchase [UPDATED]

Posted in Commentary with tags , on June 24, 2015 by itnerd

I posted what was a rumor that later was confirmed as fact last night. Now it’s official. Rogers has purchased Mobilicity. Here’s the details from a press release that is on the wires at the moment:

Rogers Communications will immediately boost speed and quality for wireless customers in BC, Alberta and Southern Ontario as part of a series of transactions announced today. The transactions mean Rogers is completing the previously announced acquisition of Shaw’s AWS-1 spectrum and acquiring 100% ownership of Mobilicity. The company is also divesting, post transaction, certain AWS-1 spectrum to WIND Mobile that is contiguous to their spectrum holdings.

Rogers as a result of this deal gains a lot of previously unused spectrum capacity that works with all LTE devices. That’s a win for them. What’s also a win for them is the fact that Industry Canada has signed off on the deal. That’s major as Telus couldn’t get that far when they made two attempts to buy them. The deal still needs to be signed off by the Competition Bureau and the Court that is overseeing Mobilicity’s bankruptcy. But one has to think that this is a formality at this point. Wind is a bit of a winner too as they get some spectrum that I am sure that they can use.

The only thing that is outstanding is if Telus is going to try and stop this via the courts. I’d watch this space to see if that happens. If it is going to happen, it will happen quickly one suspects.

UPDATE: A statement from Industry Minister James Moore has been posted. In it he says this among other things:

“The approval of these spectrum licence transfers is a win for Canadian consumers. A new wireless competitor has secured valuable spectrum it needs, and high-quality spectrum that went unused for almost a decade will now be deployed for the betterment of all Canadians.

That new wireless carrier is Wind who put out a press release to speak to what the Industry Minister said:

“This new spectrum acquisition means WIND Mobile now has a 20 megahertz AWS-1 corridor from Victoria to Ottawa,” said WIND Mobile CEO Alek Krstajic. “This will significantly improve our network performance from Ontario to the Pacific, enabling us to deploy new technology and accelerate the development of our LTE network and other services.”

Krstajic says today’s developments further enhance WIND Mobile’s position as Canada’s fourth national wireless service provider.

Things just MIGHT have become a lot more interesting in the wireless space here in Canada.

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RUMOUR: Rogers To Buy Mobilicity [UPDATED]

Posted in Commentary with tags , on June 23, 2015 by itnerd

The Globe And Mail is reporting that Rogers is about to buy struggling carrier Mobilicity:

Mobilicity has accepted an offer from Rogers Communications Inc. and plans to seek court approval of the sale, according to sources.

The small wireless carrier, which has been under creditor protection since September, 2013, plans to take the agreement to court on Wednesday morning, three sources familiar with the negotiations said.

Rogers is said to have bid more than $400-million for Mobilicity, according to two sources.

The deal is said to include the transfer of some cellular spectrum to new entrant carrier Wind Mobile Corp. This is believed to be a factor in the federal government’s willingness to approve a transaction although it has previously blocked Mobilicity’s attempts to transfer its spectrum licences to Telus Corp.

Don’t consider this a done deal yet though. Assuming this report is accurate:

  1. It has to be approved by the feds. Telus has had two attempts to buy Mobilicity shot out of the sky. Don’t be shocked if Rogers attempt ends up the same way.
  2. Telus is apparently none too happy about this. They may go to court to stop this.

So, you will have to watch this space to see how this turns out. It will be interesting to watch.

UPDATE: The Globe And Mail story that I referenced has been updated to take this out of the rumor space to being fact. Several key points have been added. The key one is that Telus apparently offered more for Mobilicity than Rogers. But Mobilicity’s creditors went with Rogers and their deal as it appeared to be the one that would pass government approval.

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Here We Go Again: Telus Trying To Acquire Mobilicity….. And So Is Rogers

Posted in Commentary with tags , , on June 20, 2015 by itnerd

For those of you at home who are keeping score, Teius has tried a number of times to buy struggling carrier Mobilicity and each time they’ve failed. Well, they’re at it again. But this time there’s a twist. Here’s what the Financial Post had to say:

The Financial Post has learned that the Vancouver-based wireless incumbent recently submitted the terms of a proposed transaction to the federal government in which it would purchase Mobilicity while agreeing to transfer the ownership of some of the new entrant’s coveted spectrum licences to its arch rival Wind Mobile, which could use the additional access to wireless airwaves despite bulking up in a March auction.

I’m not entirely sure that Ottawa would go for this as it would be a dramatic about face from a policy perspective. But stranger things have happened and this is an election year in Canada. Thus all bets are off. But there’s more to this story:

The Globe and Mail has reported that Rogers Communications Inc. also submitted a proposal to Ottawa inquiring about a possible purchase of Mobilicity. A spokesperson for Rogers declined to comment.

Hmmmm….. That’s also very interesting. It’s clear that there’s a race to snag this carrier. The question is, does either one of these members of the big three have the ability to close the deal, or will there be yet another plot twist that nobody saw coming?

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The End May Be Near For Mobilicity

Posted in Commentary with tags on March 5, 2015 by itnerd

The ongoing saga of Mobilicity may actually be coming to an end. The Financial Post is reporting that moments before the AWS-3 spectrum auction, they lost the financing that would have allowed them to buy the spectrum that they need to be a player:

The Financial Post confirmed that Mobilicity, which has been operating under court-supervised creditor protection since September 2013, sought and received approval from an Ontario court for as much as $200 million in additional funds from one of its first lien creditors a couple of hours before Industry Canada’s deadline to submit sealed bids.

Despite receiving the court’s blessing however, it is believed that minutes before Tuesday’s noon deadline the emergency financing was not made available for a number of undisclosed reasons. As a result, Mobilicity may have been left without the ability to bid for the coveted cellular airwaves reserved specifically by Ottawa for small carriers operating in British Columbia, Alberta and Ontario.

That pretty much means that without the ability to bid for new spectrum, there is no way they could possibly complete with anyone who wins spectrum from this auction, never mind Bell, Telus, or Rogers. Thus, I think that the end is near for them.

Winners of the AWS-3 auction will be announced on Friday. The death watch for Mobility however starts now.

 

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Mobilicity Lives…… At Least For Now As It Secures Financing To Compete For New Spectrum

Posted in Commentary with tags on January 27, 2015 by itnerd

The upstart cell phone carrier that I’ve had on death watch for sometime now seems that Mobilicity has enough of a life to get financing to compete for the upcoming AWS-3 spectrum auction. Here’s what The Globe And Mail had to say:

Last Thursday, the company said it had still not secured the necessary backing, but William Aziz, the chief restructuring officer, said in an affidavit Monday that the company has reached an agreement to enter into a second debtor-in-possession (DIP) financing for $65-million from some of the company’s existing debt holders.

The agreement is structured off an earlier DIP financing arrangement for $30-million the company entered into when it first filed for protection under the Companies’ Creditors Arrangement Act.

The funding is contingent on court approval, which the company is seeking at a motion in Toronto scheduled for Wednesday.

The company plans to create a new, wholly owned subsidiary called Mobilicity SpectrumCo for the sole purpose of applying to participate in the auction.

This has to be considered a last chance for the company as not getting this spectrum would leave the company at a huge competitive disadvantage. So if this fails, one would think that Mobilicity which has been under creditor protection since September 2013 is done.

Some key dates to keep in mind:

  • Deposits are due on Friday for the AWS-3 spectrum auction. That’s when we’ll see if Mobilicity truly has the cash to compete in this auction.
  • March 3rd is the deadline for sealed bids. It will be shortly after that we’ll find out if Mobilicity will be around for the long term.

Add to that the fact that Mobilicity is seeking an extension of a stay of legal proceedings against it from Jan. 30 to May 8. So that could really change the landscape if they don’t get that.

This is a story to keep an eye on as things are about to get very interesting I suspect.

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Canadian Gov’t Sued For $1.2 BILLION Over Mobilicity Fiasco

Posted in Commentary with tags , on September 5, 2014 by itnerd

This was a plot twist that I didn’t see coming.

The Globe And Mail is reporting that Quadangle which is a private equity firm is suing the Canadian Government for $1.2 billion dollars. The reason for the suit is as follows:

A statement of claim filed with the Ontario Superior Court of Justice on Thursday alleges that in 2006, representatives from Industry Canada approached John Bitove, a Canadian businessman known for his development of satellite radio provider Sirius XM Canada, and encouraged him to invest in a new wireless company.

Mr. Bitove and his partners invested hundreds of millions of dollars in buying spectrum licences in the 2008 auction for the airwaves used for cellular services and built out a network in large urban centres in Ontario, B.C. and Alberta.

The crux of the claim is that the government made assurances that it would create market conditions that would allow new entrants to establish themselves and that any investment made would not be lost as the spectrum licences could be transferred to one of the country’s dominant three wireless players after five years.

However, the government has since blocked several attempts by Mobilicity, the company Mr. Bitove ultimately founded, to sell its airwaves to Telus Corp., one of the Big Three.

“Having caused the plaintiffs to lose substantially all of their investment, Industry Canada broke its final promise by refusing to allow the sale of the business after five years,” Quadrangle said in the statement of claim.

Keep in mind that Mobilicity has been fighting to stay alive for the last little while and Industry Canada has stopped multiple takeover attempts from Telus. Thus its future is very much in limbo. Another thing to keep in mind: A lawsuit like this isn’t going to make a big foreign telco want to come and set up shop here in Canada. Thus the Canadian Government may want to fix that impression and fix it quickly so that it can deliver on it’s promise of more choice, lower prices, and better service. In the meantime, I hope that the Canadian Government has a great suite of lawyers.

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Mobilicity Gets An Extension To September

Posted in Commentary with tags on June 26, 2014 by itnerd

The ongoing saga of Mobilicity and its death spiral towards bankruptcy was supposed to come to an end by now. But it now seems that we’ll have to wait until September to see what the outcome is. That may give it time to either find a buyer or turn things around. Right now it has a $25/month promo that gives unlimited talk, text and data “for life. Perhaps that will attract enough subscribers to dig itself out of this.

We’ll see on September 26th.

 

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Telus Bails Out Of Buying Mobilicity

Posted in Commentary with tags , on May 21, 2014 by itnerd

The Globe And Mail is reporting that the latest attempt by Telus to buy struggling carrier Mobilicity has come to an end:

A source said the Vancouver-based telecom firm sent word of its decision Mobicility on Tuesday, informing them it was withdrawing its offer because conditions of the deal had not been met.

Telus is now “no longer in the mix” to obtain Mobilicity, the source said.

The source did not say which conditions had not been met. However one of them was that Ottawa approved the transfer of spectrum between Mobilicity and Telus – a transaction the government has consistently opposed.

Well. That’s not good news if you’re on Mobilicity as that really puts the future of this carrier in doubt. Maybe someone will ride in and save the day? Maybe they cease to exist? It’s hard to say at this point what may happen. But one thing that I can say is that barring an 11th hour miracle, this will not help Canadians get more competition, lower prices, and better service in the wireless space.

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Here We Go Again…. Telus Wants To Acquire Mobilicity

Posted in Commentary with tags , on April 18, 2014 by itnerd

Much like Freddy Kruger or Jason, word of a Telus/Mobilicity hookup will not die. A press release went online late last night announcing a proposed deal. Here are the key facts:

The Transaction provides for a complete continuation of Mobilicity’s business for the benefit of its stakeholders:

  • the vast majority of Mobilicity’s one hundred and sixty five thousand active subscribers will be able to seamlessly migrate onto TELUS’ advanced HSPA network after the transition.
  • no foreseen changes to employee staffing levels as a result of the proposed transaction;
  • all of Mobilicity’s retail landlords and licensors will have their contracts honoured;
  • all of Mobilicity’s landlords and licensors who provide space for placement of Mobilicity’s dealers and their employees who sell Mobilicity’s products will continue to benefit from those arrangements;
  • all service agreements with Mobilicity’s business partners will continue uninterrupted; and
  • the trade claims of Mobilicity’s creditors will continue unaffected against the restructured Mobilicity and will be addressed in the ordinary course.

While the court approved monitor recommends approval of the deal, one wonders if it will be shot down seeing as previous attempts of a Telus/Mobilicity hookup have been shot out of the sky by the Canadian government. In any case, whatever the outcome is going to be, it has to happen before June 30th. Mobilicity has asked for an extension of the stay of proceedings that would expire on that date. I can see it being extended. But I suspect it will not be extended beyond that.

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Videotron To Buy Mobilicity?

Posted in Commentary with tags , , , on January 15, 2014 by itnerd

Rumors are circulating that Videotron is interested in buying Mobilicity so that it may expand outside Quebec. Mobilesyrup has the details:

Scotia Capital’s Jeff Fan says there might be a “potential twist” brewing in the Canadian wireless scene. Fan believes that Quebecor/Videotron have signed an NDA with Mobilicity to possibly purchase their assets, which “indicates it has some interest in licenses outside Quebec.”

And:

Fan noted that Quebecor “may leverage the licenses to gain a more favorable network sharing deal with RCI (in Quebec) or become a solution to the government’s 4th operator objective in BC, AB and ON with a network sharing arrangement with Wind/Mobilicity that may also include an incumbent like Rogers.”

I discussed the possibility of Videotron becoming a 4th national carrier to challenge the big three yesterday. So if these rumors are true, this could be part of the salvation that Canadians are looking for. Though I still stand by what I said yesterday. Real relief from high cell phone costs will only come from a big carrier capable of immeidately challenging the big three coming in and setting up shop. Having said that, let’s see where this goes.

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