Mobilicity sale denied a 2nd time by Ottawa

The sale of struggling wireless providerMobilicity to one of Canada's incumbent carriers has been rejected by Industry Canada for a second time.

"Mobilicitysought views from Industry Canada on a potential spectrum licence transfer. Industry Canada considered this request under the Spectrum Licence Transfer Framework and provided a response in confidence,"Jessica Fletcher, director of communications for Industry Minister James Moore told CBC News.

"Our government will continue to enforce the moratorium on the transfer ofAWSspectrum to incumbents," Fletcher added.

Mobilicity has been looking for a buyer for months now, and an earlier $380-million takeover offer byTeluswas rejected by the federal government in June.

The wireless company is under creditor protection until December as it looks for a buyer or restructures its business, and saysdiscussions with Industry Canada about a sale are still ongoing.

The company's licence forAWSspectrumdoes not expire until next February, at which point it will be free to transfer its licence to an incumbent carrier.

The AWSspectrum was auctioned off in 2008, with a significant portion reserved for new wireless entrants including Mobilicity, Wind Mobile, Eastlink andVidotron.

Last week, the federal government approved Telus's purchase of Public Mobile, which was not under the same purchase restrictions.