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June 4 (Reuters) - Canada blocked Telus Corp's application to assume struggling upstart Mobilicity's wireless spectrum licenses on Tuesday, indicating the government's reluctance to allow large companies in the industry to gobble up their smaller rivals.
Telus, one of Canada's biggest wireless phone companies, said last month that it would pay C$380 million ($367 million) for debt-laden Mobilicity, testing the resolve of a government that has been committed to opening the market to smaller players.
"Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents," said Canada's Industry Minister Christian Paradis. "We will not waive this condition of licence and will not approve this, or any other, transfer of set-aside spectrum to an incumbent ahead of the five-year limit."