Public Mobile sold to Telus
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 start-ups from the federal government’s efforts to create more competition almost five years ago.
Telus received federal approval late yesterday to buy Public Mobile—primarily a talk-and-text service with 280,000 customers in Ontario and Quebec.
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 said such spectrum now can be deployed for next generation networks.
Public Mobile bought its spectrum in 2008 and never was 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, Bell, or Telus 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 start-ups 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 still are seeking buyers.
Financial terms of the Public Mobile deal were not disclosed.
Public Mobile’s customers will be migrated to Telus’ fast network that uses Long-Term Evolution (LTE) technology.
Telus said Public Mobile’s G-block spectrum can be used for LTE networks and for some smartphones, such as the new iPhone 5s and 5c.
“We look forward to the successful completion of this transaction, and migrating Public Mobile’s customers onto Telus’ world-class 4G LTE network while putting their spectrum to good use for millions of customers across Canada,” Eros Spadotto, executive vice-president of technology strategy and operations, said in a statement.
Canaccord Genuity’s Ghose said if the transaction is approved by the Competition Bureau, there still will be four wireless competitors in Quebec—Bell, Rogers, Telus, and Quebecor’s Videotron—and five players in the Ontario market (the Big Three plus Wind Mobile and Mobilicity).
The federal government said its goal is to have four wireless competitors in every region of the country to encourage more competition and better prices for consumers.