Mobilicity out of one airwaves auction, needs cash for another: Reuters

(Reuters) – Struggling Canadian wireless operator Mobilicity will not bid for more airwaves in one upcoming government auction and is trying to secure funding to participate in another, its court-appointed monitor said in a filing on the company’s website.

Mobilicity, which is under court protection from its creditors, has decided to forgo participation in an auction of 2500 MHz airwaves to be held in April, the report from Ernst & Young said on Friday.

The filing also said the company has not yet secured the $62 million refundable deposit it would need by Jan. 30 to bid in an auction of AWS-3 spectrum in the regions where the company operates.

As a recent entrant to Canada’s wireless industry, Mobilicity has preferential access to those airwaves and acquiring them in the auction due to start in March could make the company more attractive to a potential buyer.

If it does not participate, fellow recent industry entrant Wind Mobile could scoop up the airwaves for the reserve price.

Mobilicity had 158,600 active subscribers at the end of 2014 and customer churn — the number of subscribers who dropped the service — was 4.9 percent in December, it said.

The report said that Mobilicity has discussed selling itself with several parties, including one of its noteholders, and that talks are continuing.

Mobilicity is asking the court to extend its protection from creditors to May 8. The current stay on proceedings expires Jan. 30.

Mobilicity was founded in 2008 and is a portfolio company of U.S. private equity firm Quadrangle Group. Last September, Quadrangle was reported to be suing the Canadian government for reneging on pledges to help the small wireless provider compete against the country’s biggest companies.

(Reporting by Alastair Sharp; Editing by Peter Galloway)

(This story was edited by Kirk Falconer, editor of peHUB Canada)

Photo courtesy of Shutterstock