Employees and the founder of Canadian wireless telecom provider Mobilicity have made a proposal to the federal government to acquire the company’s subscribers, dealers, and partial infrastructure via a mobile virtual network operator structure. The deal is intended to keep the company’s brand operational in its current markets and allow it to restructure. Obelysk, a private equity firm owned by Mobilicity founder John Bitove, would provide the necessary funding. Reuters recently reported that Telus Corp and Rogers Communications Inc are currently making bids to buy Mobilicity. Since 2008, the company has been backed by U.S. private equity firm Quadrangle Group.
Proposal For Mobilicity To Remain As An MVNO To Benefit Canadian Customers, Employees, Dealers and Contractors
TORONTO, June 22, 2015 /CNW/ – Employees and the founder of Mobilicity have made an offer to Industry Canada and the Government of Canada to acquire the subscribers, dealers, and partial infrastructure of Mobilicity by setting up a Mobile Virtual Network Operator (“MVNO”) relationship with any potential acquirer. The Group is not blocking the sale nor the acquisition of spectrum. This Group feels it is important to continue to provide pricing competition in an industry that does not have enough low priced customer alternatives. As an MVNO, Mobilicity would retain:
the current loyal subscriber base of 155,000 active customers
the current dealer network of over 150 points of distribution
the existing call centre operators
other contractors vital to the operations
It is the intention of this Group to maintain the Mobilicity brand in the markets it currently operates in, notably; Toronto, Vancouver, Edmonton, Calgary and Ottawa, giving Canadians in these major metropolitan areas a fifth wireless operator.
As an MVNO, Mobilicity would have a roaming rate structure, utilizing the network infrastructure of the acquirer. This would be a net benefit to the Canadian telecom industry for the following reasons:
The service would continue, uninterrupted, for the 155,000 customers who rely on Mobilicity for their telecommunication needs and not face a pending shutdown as happened with Public Mobile.
It would allow the over 150 dealers who have invested their own money in Mobilicity continued opportunity to prosper going forward instead of facing the threat of closure.
It would allow the over 100 employees of Mobilicity’s two call centres to retain employment.
It allows the over 30 full time employees of Mobilicity to continue their mission to offer Canadians choice and options in wireless without the ultimate fear of losing their jobs.
It would preserve a viable option for customers who rely on a prepaid service, and who need the discounted pricing Mobilicity provides.
It would continue to foster competition, in 5 major markets across Canada where it currently operates.
As an MVNO, it would allow the company to restructure the current operational model, and emerge with a viable business moving forward. There is no need, or consumer or industry benefit to accelerate the demise of the company completely, when employees, consumers, dealers, landlords and others are willing and able to continue to offer a service that 155,000 Canadian customers believe and see value in.
Capital funding for the transaction would be provided by holding company Obelysk Inc.
“Mobilicity has weathered many storms and yet is still in business today. We owe it to the customers, dealers, contractors and employees to stay in business going forward and not face uncertain demise like Public Mobile or other past wireless operators in Canada. The Big 3 telecoms want Mobilicity spectrum and this Group is not objecting to that sale. Continuing to bring competition and multiple options to wireless Canadian consumers going forward is our collective goal.”
SOURCE Obelysk Inc.
For further information: Maria Yeh, firstname.lastname@example.org, (416) 361-1254
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