Telecommunications giant Telus has agreed to acquire discount wireless carrier Mobilicity for $380 million.
The Vancouver-based Telus is pitching the deal as a way to ensure “continued service” for Mobilicity’s 250,000 customers “without the risk of disruption.” But outsiders will eye the move with immense skepticism: Mobilicity was created in 2008 to foster competition in Canada’s wireless industry, and Telus acquiring the startup carrier would put Canada one step backward to oligarchy.
Of course, in order for Telus to successfully acquire Mobilicity, it must get approval first. The agreement is subject to conditions including approval by the Competition Bureau, Industry Canada, and Mobilicity’s debtholders. Telus says it has 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,” says Stewart Lyons, the president of Mobilicity. “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.”
“Mobilicity has been losing a significant amount of money every month,” added William Aziz, Mobilicity Chief Restructuring Officer. “The financial strength of Telus will allow the business to be continued in a way that will benefit customers and employees. An acquisition by Telusis the best alternative for Mobilicity.”
“We look forward to serving Mobilicity’s customers and welcoming their employees to the Telus team,” says David Fuller, Telus’ chief mrketing Officer.
If this transaction is approved, Telus says it will retain all 150 Mobilicity employees as it integrates the Mobilicity operation into itself “over the coming months.” According to the telco, Mobilicity employees would “have the opportunity to review and secure permanent, long term roles with Telus.”
Vancouver-based OpenMedia.ca believes the acquisition, if allowed to go through, “will stifle choice and fair treatment of customers in Canada’s already-broken wireless market.” OpenMedia points out that Mobilicity is one of only three carriers in Canada independent of the “Big Three” cell phone companies – Bell, Rogers, and Telus – who already control roughly 94% of the market.
“The sale of Mobilicity to Telus will stifle choice in an already monopolistic wireless market,” the organization affirms. “The deal also gives big telecom conglomerates more room to raise prices, as the check on the market provided by new entrants diminishes.”