Catalyst says it would back Mobilicity’s bid for additional spectrum

Last we heard, Mobilicity was granted creditor protection until December 1st, a date that is quickly creeping up. The most recent subscriber and financial numbers from the struggling carrier were released at the end of September, when Mobilicity announced 156,300 subs and a modest increase in cash flow.

While its future is uncertain, it seems that one of Mobilicity’s largest bondholders is considering supporting the carrier’s potential investment in the upcoming 2500Mhz spectrum auction, which begins on April 14th, 2015. According to the Financial Post, Toronto-based private equity firm Catalyst Capital Group is interested in financially backing Mobilicity’s bid for additional spectrum in the hope that it will “spur further consolidation among smaller Canadian carriers.”

Rumours of a merger between the newer wireless players have been swirling for years. Public Mobile was snatched up by TELUS, and WIND Mobile and Quebec-based Videotron have admitted to ongoing talks. Apparently WIND has also expressed interest in Mobilicity’s assets in the past, but a deal never got made.

Newton Glassman, Managing Partner of The Catalyst Capital Group, said that the goal is to have Mobilicity in “as strong of a position as possible for what is the most likely outcome for a merger of two or more of these entities.”

Glassman says he’s looking at the auction as a pure “game theory.” It should also be noted that Catalyst Capital Group declined to participate in the 700 MHz auction for unknown reasons. Perhaps it might pull a similar strategy for the 2500Mhz auction in April. It will be interesting to see if Mobilicity is still in business by the next wireless auction.