10/30/2013 12:32 EDT | Updated 01/23/2014 18:58 EST

Mobilicity sale denied a 2nd time by Ottawa

The sale of struggling wireless provider Mobilicity to one of Canada's incumbent carriers has been rejected by Industry Canada for a second time.

"Mobilicity sought views from Industry Canada on a potential spectrum licence transfer. Industry Canada considered this request under the Spectrum Licence Transfer Framework and provided a response in confidence," Jessica Fletcher, director of communications for Industry Minister James Moore told CBC News.

"Our government will continue to enforce the moratorium on the transfer of AWS spectrum to incumbents," Fletcher added.

Mobilicity has been looking for a buyer for months now, and an earlier $380-million takeover offer by Telus was rejected by the federal government in June.

The wireless company is under creditor protection until December as it looks for a buyer or restructures its business, and says discussions with Industry Canada about a sale are still ongoing.

The company's licence for AWS spectrum does not expire until next February, at which point it will be free to transfer its licence to an incumbent carrier.

The AWS spectrum was auctioned off in 2008, with a significant portion reserved for new wireless entrants including Mobilicity, Wind Mobile, Eastlink and Vidéotron.

Last week, the federal government approved Telus's purchase of Public Mobile, which was not under the same purchase restrictions.