Canada’s Mobilicity adjourns vote on recapitalisation, confirms acquisition talks

Canada's start-up wireless carrier Mobilicity, which has recently been the acquisition target of telecom major Telus Corp, said yesterday that it has put off a debtholder vote on recapitalisation of the struggling company in order to explore all strategic alternatives.

In a statement, Mobilicity said that it is in discussions with ''multiple parties'' in connection with an acquisition plan arrangement.

The debtholder vote was scheduled for Wednesday. This is the third time that the company has postponed the vote.

The company's president and chief operating officer Stewart Lyons says, ''We are working diligently to reach an acquisition agreement and thank our customers, dealers, employees and partners for their continued support as we see this process through to its completion.''

Vaughan, Ontario-based Mobilicity, formerly known as Data & Audio-Visual Enterprises Wireless Inc (Dave Wireless), was established in 2010, following the Canadian government's liberalisation of the telecom policies to attract new entrants.

The company is led by Obelysk, a diversified Canadian holding company, and Quadrangle Capital Partners, a global investor in the telecommunications and media sectors. It provides wireless mobile services in Toronto, Ottawa, Calgary, Edmonton and Vancouver.

According to latest media reports, Mobilicity is in talks with the US giant Verizon Communications Inc over its acquisition by the latter. Verizon has already submitted an offer for the takeover of another Canadian start-up Wind Mobile owned by Russia's Vimpelcom.

Both Mobilicity and Wind Mobile combined have a subscriber base of 850,000, only a fraction of the 25 million held by Canada's top three operators BCE, Telus and Rogers Communications.

In June, the Canadian government blocked a proposed $380-million acquisition of the mobile carrier by the country's second-largest telecom company Telus saying that the takeover would reduce competition in the wireless market. (See: Canada blocks Telus' $380-mn bid to acquire Mobilicity)

The government said that it would be committed in its policy to block any sale of spectrums that were reserved for new entrants in 2008 until at least 2014. It wants at least four wireless carriers in every regional market to ensure competition in the field dominated by the top three operators

In another regulatory move last month, the Canadian Radio-television and Telecommunications Commission (CRTC) introduced a new wireless code aimed to protect consumers, by banning three-year contracts besides putting cap on domestic data charges and roaming outside the country.