TELUS agrees to acquire Mobilicity for $380 million

By Bla1ze on 16 May 2013 09:56 am EDT
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The wireless landscape in Canada is changing once again as TELUS has now announced they've agreed to acquire Mobilicity. The deal worth $380 million will still need to be approved by the Competition Bureau, Industry Canada, and Mobilicity's debtholders. Over the past little while, Mobilicity was looking to have the company change hands due to financial concerns but if all goes through, it will ensure all 250,000 Mobilicity customers continue to have service without disruption.

"A concern for our customers and employees led us to approach TELUS, which has a reputation for a strong customer focus, as evidenced by their industry leading client loyalty," said Stewart Lyons, Mobilicity President. "I am confident TELUS will look after our employees and our customers, mitigating any disruption to their service, while offering the best outcome for all stakeholders."

In addition to maintaining service for customers, TELUS will also retain all 150 Mobilicity employees throughout the transition process and will offer long term employment to those employees. If you're looking for the full details, the press release from TELUS and Mobilicity can be found below.

 
Press Release
 
TELUS agrees to acquire Mobilicity
 
Mobilicity approaches TELUS to enter into agreement ensuring service continues for 250,000 customers
 
VANCOUVER, May 16, 2013 - TELUS has entered into an agreement with Mobilicity to acquire the company for $380 million. If the deal receives the required approvals, it would ensure continued service to Mobilicity's 250,000 customers without the risk of disruption.
 
The agreement between TELUS and the company is subject to conditions including approval by the Competition Bureau, Industry Canada, and Mobilicity's debtholders. TELUS and Mobilicity have informed the government and regulators and both companies are fully committed to working cooperatively to secure timely approvals for the transaction.
 
"A concern for our customers and employees led us to approach TELUS, which has a reputation for a strong customer focus, as evidenced by their industry leading client loyalty," said Stewart Lyons, Mobilicity President. "I am confident TELUS will look after our employees and our customers, mitigating any disruption to their service, while offering the best outcome for all stakeholders."
 
William Aziz, Mobilicity Chief Restructuring Officer, continued, "Mobilicity has been losing a significant amount of money every month. The financial strength of TELUS will allow the business to be continued in a way that will benefit customers and employees. An acquisition by TELUS is the best alternative for Mobilicity."
 
The entire purchase price will be used to satisfy Mobilicity's secured and unsecured debt.
 
"We look forward to serving Mobilicity's customers and welcoming their employees to the TELUS team," said David Fuller, TELUS Chief Marketing Officer.
 
If this transaction is approved, TELUS will retain all 150 Mobilicity employees as it integrates the Mobilicity operation into TELUS over the coming months. The employees would have the opportunity to review and secure permanent, long term roles with TELUS.
 
TELUS has created 1,700 new jobs in Canada over the last two years alone while bringing 4G wireless coverage to 99 per cent of Canadians coast-to-coast.
 
Acquisition agreement details:
 
Mobilicity has begun proceedings in the Ontario Superior Court of Justice with a view to obtaining approval for a plan of arrangement under the Canadian Business Corporations Act. The plan of arrangement with TELUS requires an affirmative vote by debtholders, after which TELUS and Mobilicity will seek court approval of a transaction that will see Mobilicity emerge as a wholly-owned subsidiary of TELUS. TELUS has entered into support agreements with a significant number of Mobilicity's debtholders who have committed to vote for the plan of arrangement pursuant to the terms and conditions of the support agreements.
 
TELUS and Mobilicity anticipate an expeditious legal and regulatory review in view of the current circumstances Mobilicity is facing.
 
Caution Regarding Forward Looking Statements
 
This news release contains statements about expected future events of TELUS that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and predictions and are subject to inherent risks and uncertainties. There can be no assurance that the associated benefits for TELUS shareholders of the acquisition will be realized, or that the expected regulatory and other approvals will be obtained. There is significant risk that the forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future events to differ materially from that expressed in the forward-looking statements. Except as required by law, TELUS disclaims any intention or obligation to update or revise forward-looking statements.
 
About TELUS
 
TELUS (TSX: T, NYSE: TU) is a leading national telecommunications company in Canada, with $11 billion of annual revenue and 13.2 million customer connections, including 7.7 million wireless subscribers, 3.4 million wireline network access lines, 1.4 million Internet subscribers and 712,000 TELUS TV customers. Led since 2000 by President and CEO, Darren Entwistle, TELUS provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment and video.
 
In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $300 million to charitable and not-for-profit organizations and volunteered 4.8 million hours of service to local communities since 2000. Fourteen TELUS Community Boards lead TELUS' local philanthropic initiatives. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.
 
For more information about TELUS, please visit telus.com.
 
About Mobilicity (DAVE Wireless)
 
Formerly known as Data & Audio-Visual Enterprises Wireless Inc., the company is operated as Mobilicity. Mobilicity is a wireless carrier that provides wireless telecommunication services to Canadians in Toronto, Ottawa, Calgary, Edmonton and Vancouver. Further information about Mobilicity can be found at www.Mobilicity.ca.
 
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TELUS agrees to acquire Mobilicity for $380 million

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And you mad bro? You didn't get to be super geek to say first because someone more intellectual has something to offer to the discussion? CRTC isn't mentioned in the article, so by me bringing up the CRTC which will have final say, it sparks up a real conversation for people that are smart enough.... unlike a "first" comment.

Don't hate cause you missed your chance to scream fist like an excited little girl. Quicksilver is CONTRIBUTING to the discussion, you should try it some time

Posted via CB10

#1 I'm not a chick, #2 anything to keep the losers like you posting first and #3 how did I blow it?? Final say goes to the CRTC... #4 get a life

the fact that you think you are cool or something, i need to decline that cookie and shove it up your a$$. Don't be jealous you can't be first and now trying to start $hit with me. Makes you real tough, an internet bully... i bet if this was real life, you'd be curled up in a ball crying for your mom when you try to start a fight with me.

Anyways I'm done with your pathetic taunts. You called me immature, but clearly you are the immature one who feels the need to try to show your e-gina on a webforum.

Wow this sucks. Here is one of the big three becoming even bigger, greedier and monopolizing.

Posted via CB10

Will Telus phase out Mobilicity AWS bands 1,4,8 and then US people on T-Mobile can no longer turn to Mobilicity for early release devices?

:(

~STV

They can't phase out the bands per se, but they can redeploy them. Telus could choose to redeploy that AWS bandwidth that Mobilicity uses for HSPA+ for its LTE network. It works out pretty well, actually, as Telus' LTE network also uses the AWS band.

Edit: for US AWS HSPA+ customers (like current T-Mobile customers in most places,) yes--this will be a bit of a hindrance. One less Canadian carrier to buy AWS UMTS banded phones from. WIND and Videotron will be the only remaining choices, AFAIK.

If CRTC approves this deal, they better be working on new regulations allowing unlimited data plans for under 60 bulks! Paying over 50 bulks for using the Internet on the go is ridiculous! It's no longer a luxury more of the day to day norm!

Posted via CB10

What's so awful about it? What's the alternative - fold Mobilicity altogether? Obviously, the discount model wasn't working - people who RELY on cellular service will never trust a discounter, no matter how little they charge. Mobilicity and the other discounters have very spotty coverage, weak signals and no coverage whatsoever outside of the major city limits. They're great if you never venture outside of a big city like Toronto, and even within Toronto they have a lot of dead zones.

Teenagers are a big market, but no mobile phone service company can survive without business customers, and Mobilicity had no chance of acquiring them. At least the jobs will be saved (for a while, anyways), and the rest will probably be rolled into Koodo.

This.

I'm with Rogers and I really can't stand them as a company. Both due to the level of customer service I receive and because of the huge bill I pay every month. But I can't say anything bad about the quality of service. In the 10+ years I've had my phone with them I can count on one hand the amount of times I've experienced network outages or just weak cellular signals.

The big three are terrible on one end of the spectrum, but on the other end they can't be beat.

And of course, people hate the huge monthly bill but as per Mobility, it seems obvious why the bills are "high". They can't survive otherwise.

~TheRealFixxxer

Somehow phone companies outside of North American can survive on bills that are maybe 1/4 of what we've got here. If the companies charging reasonable money can't make it, it's because there's something severely flawed with the industry.

It's called population density. Compare population density in all of western Europe with what we have in Canada, or even the US. How many cell towers do you need to provide service to 1,000,000 people? Cell tower density is based on physical distance. That's why discounters thought they could make it work in large cities in Canada. Just don't go outside of the large cities.

Not true.
You obviously can't compare Canada to a Western European country, but the population density point is pretty much a red herring. Do you really think Rogers has service in every inch of this country? Many in rural Canada still don't even have 3g let alone LTE, and if you venture any further service drops off completely. In terms of our urban population, we have a higher proportion of our population living in major cities than compared to other countries like the United States. So if we pay more for wireless service, it's not due to density, it's due to inefficiency.

Posted via CB10

Actually the population density is still a valid argument. Rogers' service socks in Alberta once you get outside the major urban areas. Telus has better coverage and many here venture outside that zone regularly or live outside it. Southern Ontario is fairly dense for Canada, but is still quite light compared to Europe and Asia.

Posted via CB10

75% of the Canadian population lives within 100 miles of the US border. Not to mention the great extent to which that population is concentrated in cities like Toronto, Montreal, Calgary, Ottawa, Edmonton and Vancouver. That's about 1/3 in those cities alone.

But the population density even in big cities is about 1/10th of density in big European cities. How many people in Paris live in single family detached houses with yards?

Posted via CB10

Fully agree with you. People in Canada seem to think that we have high density, but it's very light compared to most of the rest of the world. We’re spoiled that way.

Posted via CB10

The discount model does work, when the CRTC and the MLA's ACTUALLY stand up to the big companies help the little guys in building their company.

When startups have to buy spectrum from the big players, be it cable/ADSL or wireless, and those companies unreasonably charge a higher rate (one example is roaming charges and lack of partnerships), said startups die. (there's a lot more that happens and is NOT within the competative guidelines set forth by the CRTC)

And don't be fooled by this notion that allowing the players in the US to come up would be any better. A simple look at Wally's World and Tarjey is enough to keep the idea of real competition as nothing more than a dream.

Shaw Cable was going to start up a wireless operation and dropped the idea......why?, because they knew the big 3 would do everything in their power to prevent it. Shaw's big, but not against the likes of Rogers and Belus.
Now, a Shaw/Cogeco and Eastlink partnership and purchase of WIND could make some waves.

Meh. Shaw could outdo telus if they wanted to. I just think bell and Rogers are the real problem for Shaw. Shaw owns most of the internet wires and phone lines to the boxes telus needs to run their net and phones and tv. And then in the east its bell and rogers that would stop Shaw. Actually from what I see. Rogers in the west is on telus' towers as well.

Oil sands Fueled

Rogers is on their own. Bell shares with Telus. Rogers started their system on GPRS/GSM whereas Telus and Bell started on CDMA.

Posted via CB10

Terrible News... Come on government. Figure out a way to keep other players in the game outside of the Big 3.

Not the greatest news. It's better to have more competition, but I imagine Mobilicity's services will be rolled into Koodo. From what I've seen Koodo is pretty respectable regarding rates and plans. I've even managed to get a pretty good deal out of Telus themselves, but you have to stay on top of them.

Posted via CB10

Why do you think they are so respectable with rates and plans? The generosity of Telus shareholders?

Koodo is cheap because mobilicity and wind force them to be cheap. If those two are gone, Koodo's cheapness will be gone too.

Posted via CB10

Our triopoly just keeps getting bigger and bigger. No wonder Bell, Rogers, and Telus can get away with pretty much anything.

Posted via CB10

I don't think the government would let this happen... I would think that they would allow acquisition from another entrant or through foreign ownership since they have opened up that door with Wind.

But we will see I guess. Sad news for customers though as less competition means more gouging.

Posted via me on my Z10

This deal will be fine if the government removes the spectrum from the deal. That would allow Mobi to sell their spectrum to Wind, which would be great.

Posted via CB10

Hope Mobilicity's customers move to Wind, at least support the one remaining resistance against the big 3.
I for one am moving my two lines from Telus to Wind. Just need them to release the Q10 already!

Posted via CB10

I totally do.

I paid clearnet every month at the end of the month. One day I got a nasty call at 7am on the 15th demanding I pay my bill to Telus and threatening legal action (before my bill had even arrived). That's how I found out they were bought out.

A very angry me and lots of yelling and escalating later and I'm proud to say I haven't worked at telus or purchased from them since :). God I hate that company.

Posted via CB10

I am with Wind, I have unlimited Canada wide calling, unlimited video/picture/text and unlimited international text. I also have unlimited data (it is throttled over 5 GB) with voice mail and I am paying $48/month... My daughter lives with her mom in a suburb in Ottawa (No Wind service) she has less than what I have and is with Bell, I am paying $84/month...
The big three suck... Now with Telus buying out Mobilicity... I hope the CRTC says NO!!!

I'm not sure about the timeline, but looking at Wind's expansion map for Ottawa, coverage shouldn't be an issue for very long.

Hopefully they can continue to grab people over to their service. Unfortunately it's the lack of nation wide Wind coverage that is keeping people away. I am currently with Wind and I roam when I am out of their coverage areas, the usage while roaming on my monthly bill is still *LESS* then the monthly bill from one of the big 3.

For people on the fence, it really is worth looking into the switch.

Ugh! I'm not even with them nor Telus, but this is a terrible idea! This is precisely why we have no real competition in Canada.

Posted via CB10

my wife ditched rogers and did not want to go to telus and went to mobilicity. living downtown YYZ, service is great with them. so really, nothing will change for her other than perhaps them taking them away her decent unlimited plan.....which is certainly not nothing. sounds like bankruptcy was another alternative.

I am with Mobilicity...and I am sad :(

I guess I'll have to wait and see how expensive my cell bills get now. I'm starting to limber up and stretch to see if I can grab my ankles in preparation for the inevitable reaming I'm about to receive...oh joy.

All just a little bit of history repeating.

For those to young to remember. It was back in the G-funk era of the mid 90's that the Government of Canada decided that Bell and Cantel (Rogers) were to big and powerful and there needed to be more competition. So this was the PCS revolution (AKA 2G AKA 1900MHz) and the government reserved blocks of spectrum for new entrants to the market. These new entrants were ClearNET and Fido. They were supposed to change the wireless landscape, do away with contracts, lower prices, fair per second billing, and lots of other good stuff. There was a 5 year clause to help these companies grow that said these companies could not be bought out and the big 2 at the time had to give them cheap roaming. By 2002 both ClearNET and Fido (as we knew it anyway) were gone, 3 year contracts were introduced and per second billing is ancient history. But now there's 3 as Telus used the clearNET acquisition to expand east and become a national player.

So then a few years ago, there was an AWS auction, two potentially national players emerged - Wind and Mobilicity. Promised to introduce real competition, no contracts, lower prices and all that. Just like before there was the usual no buyout period and must give the little guys cheap roaming clauses. Just like before, we are nearing the end of the no buyout period and Mobilicity is gone and Wind is up for sale. Nothing changes.

We need regulation on the Big 3, not more companies that will be around for 5 years and then swallowed up. That approach to changing the Canadian wireless landscape has failed twice now. The CRTC needs to grow a pair and actually regulate to oligopoly

Totally agree, the CRTC needs to start exercising its power and protects the interests of consumers.
- an end to the locking of phones, a binding contract already exists between the service provider and the customer.
- limits on roaming charges similar to EU regulations
- the force building and sharing of infrastructures in rural and sparsely populated areas in order to provide safety and economic benefits for all Canadians.

Those economic benefits to all Canadians you speak of amount to nothing more than a subsidy of rural consumers by urban consumers.

Nice thought though.

Posted via CB10

That's really bad for us consumers, CRTC should stop this game of favoritism to the big 3, I see in the near future wind mobile being bought by either rogers or bell

Posted via CB10

Mobilicity contracts should hopefully be grandfathered in like Clearnet was when they got bought out.

I was with Clearnet back in early 2000's. After BCmobility (now Telus) bought them out, I had 2 years of per second billing and I managed to slip through the cracks and didn't have any long distance charges through out BC, lol! It sucked when I got a $400+ bill, but they didn't try to make me back pay :-)

Hang on to your contracts and even if you're paying month to month...they'll have to honor your agreement.

Posted via CB10

I sure hope that our current plans are grandfathered. I was an 'early adopter' and got myself on their "Friends and Family" plan. Basically, my plan is unlimited everything (North American LD, data, BIS, VM, Tethering, etc.) - and is valid as long as my account was in good standing.

Unfortunately, I can't locate my original contract, so I can't review it to see if there's a clause in there where they can change the plan with appropriate notice. My assumption is that there is something like that in there. Frankly, I'd be very surprised if there wasn't some sort of clause in the contract where they could change any aspect of their plans as long as notice was given.

Not overly optimistic...

I'm a bit of a noob when it comes to spectrum and frequencies. I've tried searching and getting information about this but with very little success. What is it exactly? and why is there biddings on different frequencies.

Lastly, if Telus gets the Mobilicity subscribers, would they be on the Telus Network and using 4G, LTE, etc?

When Rogers bought up Fido, they did not phase out the Fido network, they incorporated it into their netwrok.

My guess is telus will leverage all the towers, with giving some access to kodoo, so this will beef up the telus network for telus customers, and then it will expand kodoo network and customer base.

My guess is they will allow customers to keep their mobilicity plans for a short period of time, then send out messages once terms and tabs are done that customers much choose a new package.

Posted via CB10

Ppl fail to understand that a company cannot give unlimited everything and still be profitable! This is why mobilicity is out asap, and the same will become of wind.

Posted via CB10

Bad news. We wanted competition and what we get is spectrum sold out to big 3 directly or indirectly through such acquisitions.

This is bad practice and approves must look into it. Tho I doubt it very much. As most of these approves seems to be bought and paid for already.

The question here is what will happen to unlimited plans tho? Would they be retained or scraped? And if retained will they be limited to city limits or they will be usable coast to coast, no home and away zone kindda stuff?

Posted via CB10

How sad really, Canadians complain about their cell phone bills and never made the switch. I loved both wind and mobilicty. had unlimited data, unlimited long distance including usa, international texting even was tethering to my computer it was amazing and less than 40 bucks.

People moan about the lack of competition. Yet they tap these messages out on a rogers device or whatever.
Like all things, we are getting what we pay for.

Posted via CB10

Get Vodafone up here.. theyre the biggest company in the world i think for a cellular company.... .parent owner of verizon..except.....if they do come.....please dont use the sim card GSM/HSPA system.... not CDMA ....=)

Posted via CB10

I hope the CRTC denies the acquisition and disproves of it entirely. It doesn't matter if mobilicity declares bankruptcy, JUST LET THERE BE TWO COMPETING LOWER PRICED PROVIDERS!!! Hope NOBODY robs me of windmobile's unlimited everything for $40/month. Hell no. I won't switch to the big three or suck their cash dongles either. They can kiss my wallets ass!!! WE NEED COMPETITION, NOT SWALLOWED UP!!