POLITICS

Wind Mobile wants clarity on rules for buying new players like Mobilicity

05/17/2013 04:23 EDT | Updated 07/17/2013 05:12 EDT
MONTREAL - Industry Canada needs to make it clear if it's going to uphold its own rules on the sale of new wireless carrier Mobilicity, says the CEO of small competitor Wind Mobile.

Big carriers like Rogers, Bell and Telus shouldn't be allowed use loopholes or do creative deals to get around the rules, Anthony Lacavera said Friday.

"The government can say either you can do deals like that or you can't," Lacavera said in an interview.

"Rules are always open to some interpretation. So at a minimum, the government needs to be clear and decisive and fast with what they say."

Telus announced a plan Thursday to buy struggling wireless carrier Mobilicity for $380 million. The company has asked for regulatory approval for the deal before Mobilicity's five-year licence expires because of its poor financial situation.

Mobilicity, as well as Wind Mobile, bought spectrum — radio waves over which cellphone networks operate — that was set aside for new players to bid on in order to bring more competition to the cellphone market. As a result, their licenses can't be sold and transferred to any of the big carriers until next year.

Industry Minister Christian Paradis has said he will take the time he needs to review the Telus-Mobilicity deal, but Lacavera said there has to be clarity on the rules before carriers can make their applications on June 11 to bid in the next spectrum auction.

Wind Mobile, with its just more than 600,000 subscribers and no-contract service, faces an uncertain future.

Dutch owner VimpelCom has put Wind Mobile up for sale, opening up the possibility that one of the big three could swoop in and pick it up.

It has also been reported that Pubic Mobile, the third company that launched after the last spectrum auction, has hired an investment banker to find a buyer.

Public Mobile isn't under any the same sale restrictions because it bought a different kind of spectrum, but the company has said it also wants the rules that were set out to be followed.

"We are at a critical juncture in the development of sustainable wireless competition in the Canadian wireless marketplace," Public Mobile said in a recent submission to Industry Canada on transfers of spectrum licences.

Public Mobile noted Paradis has made it clear that he wants to have four wireless competitors in each region of the country.

"The intent of the policy was not to have this set-aside spectrum to end up in the hands of the incumbents," said Public Mobile, referring to Rogers (TSX:RCI.B), Telus (TSX:T) and Bell (TSX:BCE).

Both Wind Mobile and Public Mobile worry about the eventual state of competition in the wireless industry and the impact on the prices that consumers will pay.

"Obviously, Bell, Telus and Rogers know that the game might almost be up so they're not going to be inclined to be handing out as aggressive promotions anymore," Lacavera said.

Public Mobile said if Ottawa doesn't act, the recent benefits of competition from the new wireless carriers would be lost to consumers and businesses.

Rogers also has complicated matters for Industry Canada with an option to buy unused spectrum from Shaw Communications Inc. (TSX:SJR.B) purchased in the set-aside auction for new competitors in 2008. Even though Shaw hasn't launched a wireless business, the licence doesn't expire until next year either.