Telus, Rogers in race to buy Mobilicity with federal approval -GLOBML

Fri Jun 19, 2015 9:07pm EDT
 
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June 19 (Reuters) - Telus Corp and Rogers Communications Inc are looking to acquire wireless telecommunications provider Mobilicity, and the Canadian government is expected to approve a deal with one of the suitors, the Globe and Mail reported, citing copies of two opinion letters obtained from Industry Canada.

The approval for a deal with one of Canada's top telecommunications companies would be a dramatic change in the government's policy that has been pressing to spur competition in the wireless industry, the Globe and Mail said.

Mobilicity, which has not yet chosen a buyer, is expected to make an announcement within the next week. The price range is said to be above C$300 million, a source close to Mobilicity told the Globe and Mail.

At least one of the proposed deals includes the transfer of cellular airwaves to wireless provider Wind Mobile Corp. The inclusion of Wind is believed to be a key factor in the government's reasoning, the Globe and Mail reported.

Telus, Rogers and Mobilicity were not immediately available for comments on the Globe and Mail report.

While Telus recently reported higher revenue from its wireless and wireline businesses, Rogers has been struggling to maintain its leading position in the wireless industry.

Mobilicity, which has been under creditor protection since September 2013, was previously blocked from selling cellular airwaves licenses to Telus on several occasions, the Globe and Mail said. The federal government cited spectrum transfer policy in blocking the Telus deals.

However, this month Peter Hill, director of the spectrum management operations at Industry Canada, indicated that the government would approve deals involving either Rogers or Telus, the Globe and Mail said.

(Reporting by Shubhankar Chakravorty in Bengaluru; Editing by Leslie Adler)