A deal has been struck and approved by a court in Ontario for Rogers Communications, Inc. to purchase small wireless carrier Mobilicity in a deal valued at $465 million. Mobility has been under creditor protection since September 2013 and has been the subject of a bit of a bidding war that includes Telus Corporation. Although Mobilicity is small, the company does possess valuable spectrum, hence the interest from the larger carriers.
Mobilicity originally purchased its spectrum in 2008 for $243 million. As recently as last year, Telus had offered $350 million for the spectrum. However, Mobility has continued to have trouble selling its spectrum to the larger carriers due to government regulatory concerns that spectrum would become too concentrated in the hands of only three carriers. The new deal with Rogers includes requirements for Rogers to also purchase spectrum from another small carrier, Shaw Communications Inc., in the amount of $100 million. Rogers will then complete an AWS-1 spectrum swap with newcomer Wind Mobile Corp.
For customers, Anthony Booth, president of Mobilicity, says:
“The transaction with Rogers provides the best possible outcome for Mobilicity's customers, dealers and employees. Rogers ensures certainty of service for Mobilicity customers, provides a great network, national coverage and high quality products and services. At the same time, Mobilicity employees will have the opportunity to work at a great Canadian company in Rogers.”
Completion of the deal is still subject to some additional approvals by courts and regulatory agencies, but is believed to be acceptable for these parties. Sources indicate Telus is claiming they have offered a better deal than what Rogers offered, so the potential exists that they could challenge the deal.
source: The Globe and Mail
