Canadian telecom firm Telus to buy bankrupt rival Mobilicity for $350 mn

Telus Corp, one of big three telecom companies in Canada, yesterday struck a deal to buy bankrupt wireless start up Mobilicity for $350 million, a deal which has to be approved by the government.

Mobilicity said that a court-appointed monitor has recommended the deal, which provides for a complete continuation of Mobilicity's business, and has the backing of around 95 per cent of the holders of the company's 15 per cent senior unsecured debentures due in 2018.

The Canadian government had last year blocked the deal on two occasions on grounds that the acquisition would allow Telus to corner wireless spectrum, but the market for commercial mobile services has since changed after the January spectrum auctions in the country.

William Aziz, Mobilicity's chief restructuring officer, said in an interview, ''Mobilicity's share of the Canadian wireless spectrum is not significant and that the Telus acquisition is not going to change the competitive landscape.''

Mobilicity, which has been operating under bankruptcy protection since late September 2013, said that it had conducted an exhaustive process to sell the company and contacted 25 suitors but received only 5 bids but only Telus offer was acceptable.

Formerly known as Data & Audio-Visual Enterprises Wireless Inc, Mobilicity has 165,000 active subscribers and offers lower-cost unlimited talk and text plans.

Telus is Canada's second-largest telecom company with annual revenue of $11.4 billion and 13.3 million customers, including 7.8 million wireless subscribers, 3.3 million wireline network access lines, 1.4 million Internet subscribers and 815,000 TV customers.