Government ordered to repay Mobilicity investors in decade-long court battle

A decade-long telecom court case in Canada between the previous owners and majority shareholders of Mobilicity against the Canadian government has finally concluded. An Ontario judge has ruled in favour of the Moilicity crew, according to a report from The Globe and Mail.

This all began years ago when the government decided to set aside a chunk of wireless spectrum that would be reserved for smaller players, ensuring that the big three telecom companies could not buy it all. Then, in 2008, it approached the original Mobilicity investors and presented them with the opportunity to bid for this new spectrum and start a new Canadian carrier.

Things seemed good, so the team went ahead and created Mobilicity. However, in 2013, the government changed the rules for reselling spectrum to once again try to stop the big players from acquiring it all. During this time, Mobilicity was struggling and looking to sell to a larger company. However, the new limitations on who could buy its spectrum drastically lowered its value in the market.

The ex-carrier’s team said that Telus offered more for the company, but the rules prevented it from selling, even though the two companies had entered sales talks prior to the government’s updated spectrum resale rules. The government didn’t change the rules until it made an exemption for Rogers to buy the carrier two years later in 2015.

The government is now required to repay the shareholders for their initial investments in Mobilicity after the sale in 2015, plus prejudgment interest. The Mobilicity team expects that it will get around $500 million once it’s all calculated.

Source: The Globe and Mail