Industry Canada approves Telus acquisition of Public Mobile’s spectrum

Telus Corp. reached a deal to purchase Public Mobile Inc., and received Industry Canada's permission to acquire the new entrant carrier's spectrum licences, the companies said. In a joint release Wednesday, the companies said the deal, which must still be approved by the federal Competition Bureau, would allow Telus to acquire “100 per cent ownership” of Public Mobile, which was seeking a buyer earlier this year, as well as its 280,000 wireless subscribers. “Following our review of strategic options for our organization, TELUS stood out as the company most committed to strong customer service and innovation. We are confident this is the right decision for our customers, our company, our employees and our investors,” Alek Krstajic, Public Mobile’s CEO, said in a release. “This transaction is the best option to guarantee continued quality service for our customers and to maximize the opportunity for our employees and investors.” Industry Minister James Moore said in a separate release Wednesday that Industry Canada has already given the companies permission to transfer Public Mobile’s spectrum licences to Telus. All wireless spectrum transfers are subject to ministerial approval under new rules released by Industry Canada earlier this year, which said at the time that it would use the rules to block transfers that would result in an “undue concentration” of spectrum. “This transaction does not materially change the spectrum concentration of incumbents in this country and therefore will not diminish competition in our wireless sector,” Moore said in a statement. Public Mobile spent $52.4 million in a 2008 Industry Canada auction to acquire 10 MHz of wireless spectrum in parts of Quebec and Ontario. That spectrum, which falls under the so-called “G block” of airwaves, is not considered as valuable as other spectrum blocks because it is not as widely used in other jurisdictions and does not currently support most available mobile devices. The spectrum was not part of the airwaves that were set aside for new entrant players in the 2008 auction, and is not subject to an Industry Canada moratorium that prevents incumbent carriers, such as Telus, from acquiring the set-aside spectrum licences until next year. Eros Spadotto, Telus’ executive vice-president of technology strategy and operations, said in the joint release that Telus would transfer Public Mobile’s customers onto its other wireless networks and that the company would put the G block spectrum to use “for millions of customers across Canada.” “Public Mobile's PCS G block spectrum is part of a developing ecosystem that is being driven by the insatiable demand consumers have for access to wireless data applications,” he said. “Major U.S. carriers are ensuring this spectrum is purposed for the deployment of LTE networks and notably, the iPhone 5s and 5c have this spectrum ecosystem incorporated within their chipset, consistent with the trend across smartphone manufacturers to produce products that can be sold globally with a lessened need for customization on a market-by-market basis.” Telus, which did not release the financial terms of the deal with Public Mobile on Wednesday, previously purchased G block spectrum in Alberta and British Columbia from Novus Entertainment Inc. earlier this year. In a notice posted on Industry Canada’s website Wednesday, the federal department said the deal it approved included the transfer of all four of Public Mobile’s spectrum licences, which cover eastern Quebec, southern Quebec, eastern Ontario and Outaouais, and southern Ontario. The department said the companies submitted the deal for its approval on Oct. 2. Industry Canada is also reviewing a proposed deal that would see Telus acquire Mobilicity, another new entrant carrier that is currently going through bankruptcy protection proceedings. Toronto-based Thomvest Seed Capital Inc. and New York-based Cartesian Capital Group LLC purchased Public Mobile in June after the company was unable to attract other potential buyers. Stefan Clulow, Thomvest’s managing director, said at the time that the two private equity firms aimed to become “Canada’s fourth wireless player.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Industry Canada approves Telus acquisition of Public Mobile’s spectrum

News | October 23, 2013

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