One of the key components in TELUS buying Mobilicity for $380 million was acquiring valuable wireless spectrum that all Canadian mobile carriers are seeking.

However, the federal government will not allow Mobilicity to transfer its wireless spectrum to TELUS, it was announced at a news conference in Ottawa on June 4th.

Industry Minister Christian Paradis said: "Our government has been clear that spectrum set aside for new entrants was not intended to be transferred to incumbents."

When Mobilicity was formed in 2009, it was stipulated that new wireless carriers were prohibited from selling their spectrum to an incumbent within five years.

The government will not "waive this condition" noted Paradis, adding that other transfers of "set-aside spectrum" will not be approved. The minister said he would use all tools necessary to ensure there are at least four wireless competitors in every region of Canada.

"Today’s decision is unfortunate for Mobilicity’s 250,000 customers, 150 employees and debt holders, who now face considerable uncertainty due to the pressing financial challenges facing the company," said a spokesperson from TELUS.

Currently, Rogers Communications has two deals on the table with Shaw and Videtron that hinges on acquiring unused spectrum.

Discuss this further in our TELUS Mobility and Koodo Wireless forum.