Mobilicity turns to the courts for process on transfer of its wireless spectrum

TORONTO – A court has opened the door to the possibility of allowing financially struggling Mobilicity to sell its valuable wireless spectrum along with other assets.

The small, Toronto-based carrier is operating under creditor protection and is trying to find a buyer.

Mobilicity paid the federal government $243 million for its wireless spectrum in 2008, subject to a ban on selling those spectrum licences to one of the major carriers.

That ban expires Feb. 12 , but the company says it has been unable to “reach a clear understanding” with Industry Canada on what happens after the ban expires.

As a result, Mobilicity turned to the Ontario Court of Justice which is supervising its sale under the Companies’ Creditors Arrangement Act (CCAA).

In a ruling this week, the court set up a process under which such a sale might be allowed.

Mobilicity would have to give Industry Canada, and any interested parties, 14 days’ notice of a sale, including the sale of its wireless licences.

That would give time for all parties to respond before the court would make ruling on such a sale under the CCAA.

Industry Canada has twice refused Mobilicity’s sale to big carrier Telus (TSX:T), saying that a purchase by a major carrier, such as Telus, Rogers (TSX:RCI.B), or Bell (TSX:BCE), would decrease competition in the wireless industry.

Mobilicity operates in Toronto, Ottawa, Calgary, Edmonton and Vancouver and has almost 180,000 cellphone customers.

It has said has enough cash to keep operating until the second week of February.

Bidders for Mobilicity haven’t been made public.