Canada's Mobilicity this week announced that it has been granted an extended period of creditor protection by an Ontario court, giving the troubled telco more time to work out a survival plan after the collapse of its proposed acquisition by larger rival Telus.

The mobile provider will operate under court protection until 26 September, an extension of almost three months on its previous 30 June deadline.

Telus' planned C$350 million takeover is officially off the table, according to the latest report from Mobilicity's court-appointed monitor, which was published on Tuesday.

Telus walked away from the deal after significant opposition from the government, according to Canadian press reports over the past month. However, until now there had been no official announcement from any party.

Last month Mobilicity revealed that the government had agreed to participate in court-ordered mediation regarding the takeover.

The monitor's report confirms that the deal is off, but declines to comment further due to the ongoing mediation process.

Mediation or otherwise, it seems unlikely that Ottawa will reverse its stance on the Telus deal.

It has blocked repeated attempts by the telco to acquire Mobilicity primarily on the grounds that Mobilicity holds spectrum that was reserved for newcomers to Canada's mobile market. It does not want that spectrum to end up in the hands of Telus or any of Canada's big three operators.

A specific bar on the sale or transfer of Mobilicity's spectrum expired earlier this year, giving Telus an opening to make another offer for the telco, its previous bid having been blocked by the state last summer.

But the government is determined to prevent Telus from taking control of the frequencies in question, and on a broader scale, introduce a stronger competitor into the market to take on the big three: Telus, Bell Canada and Rogers Wireless.

It was especially keen to see a foreign player enter the Canadian mobile sector, but talk of Verizon taking part in January's 700-MHz spectrum auction came to nothing. Wind, among the biggest of Canada's alternative players, also pulled out on the eve of the contest. Nonetheless, Industry Canada – a government department focused on