Newspaper article The Canadian Press

Public Mobile Sold to Telus with Fate of Wind Mobile, Mobilicity Still Uncertain

Newspaper article The Canadian Press

Public Mobile Sold to Telus with Fate of Wind Mobile, Mobilicity Still Uncertain

Article excerpt

Telus allowed to buy startup Public Mobile

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Public Mobile has been bought by Telus, eliminating the small company from Canada's wireless landscape and leaving Wind Mobile and Mobilicity as the remaining cellphone startups from the federal government's efforts to create more competition almost five years ago.

Telus received federal approval late Wednesday to buy Public Mobile, primarily a talk-and-text service with 280,000 customers in Ontario and Quebec.

Federal Industry Minister James Moore approved the transfer of Public Mobile's spectrum licence to Vancouver-based Telus, saying the transaction doesn't affect competition in the wireless industry.

Canaccord Genuity analyst Dvai Ghose called the deal a "surprise move," saying it eliminates a small competitor for Telus, Rogers and Bell, as well as for Wind Mobile, Mobilicity and Quebecor's Videotron.

"It also highlights that the new entrants have, by and large, failed," Ghose said in a research note.

Industry Canada said Public Mobile's spectrum -- radio waves needed to operate cellphone networks -- isn't used for the latest smartphones and data plans. However, Telus says such spectrum can now be deployed for next generation networks.

Public Mobile bought its spectrum in 2008 and was never under any restrictions that would have prevented it from being sold.

Wind Mobile and Mobilicity bought a different kind of spectrum that the government does not appear to want sold to Rogers (TSX:RCI.B), Bell (TSX:BCE) or Telus (TSX:T) when their spectrum licences expire next year.

"We will not approve any spectrum transfer request that decreases competition in our wireless sector to the detriment of consumers," Moore said in a statement.

All three startups launched in recent years have made only a dent in attracting consumers away from the big three carriers, who have about 26 million customers between them.

Telus tried to buy struggling Mobilicity last spring, but the $380-million deal was rejected by Industry Canada. Both Mobilicity and Wind Mobile are still seeking buyers.

Financial terms of the Public Mobile deal were not disclosed.

Public Mobile's customers will be migrated to Telus's fast network that uses Long-Term Evolution (LTE) technology. …

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