Struggling wireless company Mobilicity gets court-approved creditor protection

Small wireless carrier Mobilicity says it has asked for and been granted creditor protection by the courts.

Mobilicity, which has been looking for a buyer, says creditor protection will allow it the necessary time and financing to complete a transaction now before Industry Canada for review and approval.

The Toronto company, which launched in 2010, provided no details about the transaction, but said it was in the best interests of its stakeholders.

Meanwhile, it says it will be business as usual for the company’s 250,000 cellphone customers.

One of Canada’s major carriers, Telus (TSX:T), tried to buy Mobilicity for $380 million last spring. However, the transaction was refused by Industry Canada because the small company’s licence for spectrum — radio waves needed to operate cellphones — doesn’t expire until next year.

It was also rumoured that U.S. giant Verizon was taking a look at Mobilicity and another of Canada’s small telecoms, Wind Mobile, but Verizon said later said it was taking a pass on the Canadian wireless market.