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Mobilicity has 250,000 customers.Kevin Van Paassen/The Globe and Mail

The federal government just put another nail in the coffin of Mobilicity, the struggling wireless provider that is trying to sell out to Telus Corp.

Industry Minister James Moore just approved the sale of spectrum from rival Public Mobile to Telus. A press release from Telus asserted that it would take full ownership of the company pending approval from the Competition Bureau. Good news for Mobilicity? The opposite, in fact.

Public owns so-called G band spectrum, which is not subject to any specific controls on sales to incumbents. Mobilicity has AWS spectrum, which is subject to controls. Mobilicity is trying to get a waiver to sell before a government moratorium on AWS spectrum sales ends early next year, saying recently that its case is before Industry Canada.

It doesn't sound like help is forthcoming, as Mr. Moore made a point of singling out AWS spectrum in his statement.

"Our government will continue to enforce the moratorium on the transfer of set-aside AWS spectrum to incumbents," Mr. Moore said. If there's any hope in there for Mobilicity it's the statement that follows, in which Mr. Moore says "We will not approve any spectrum transfer request that decreases competition in our wireless sector to the detriment of consumers."

Given that it's not clear Mobilicity can survive without a sale, a sale to Telus might not strictly decrease competition given that either way Mobilicity could disappear from the scene.

The best hope for the government would be for an independent player to buy Mobilicity to use as a platform to compete against Telus, Rogers Communications Inc. and BCE Inc. But there are few signs that is going to happen.

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