Globalive to enter mobile market in 2H09

5 Sep 2008

Toronto-based Globalive Communications has revealed plans to launch commercial mobile phone services over its own newly built network in the second half of 2009. Globalive, parent of Canadian long-distance service reseller Yak, won 30 wireless spectrum licences worth CAD442 million (USD416 million) in a national auction in July, giving it good coverage of every province except Quebec (where it was almost completely shut out by Quebecor, parent of cableco Videotron, which bid CAD554.5 million for 17 licences). Globalive won its concessions via a bidding syndicate with two international telecoms investors, Egyptian-backed Weather Investments and Icelandic firm Novator. According to Canadian newspaper The Globe & Mail, Weather, which also controls Egyptian mobile group Orascom Telecom, has committed to invest USD700 million over four years in the Canadian start-up, which plans to roll out commercial wireless services in Toronto, Calgary, Edmonton and Vancouver in its first rollout phase in 2H09, following a trial scheduled for the second quarter.

Egyptian billionaire Naguib Sawiris, head of Weather and Orascom, said Canada is an attractive market because of ‘muted competition’, relatively low numbers of cellular users and high wireless sector profits. The Egyptian group holds 65% of equity in Globalive’s mobile venture, but its voting share is limited to 20% by Canada’s foreign ownership rules, which restrict internationally-held shares in telecoms companies to 46.7% overall. If the federal government decides to lift the ownership restrictions, as a state-appointed review panel recommended in June, Orascom/Weather intends to take full control of Globalive. The Globe & Mail reports that Globalive will focus on pre-paid voice services, rather than data services such as streaming video and TV, in contrast to the plans of nationwide mobile incumbents Rogers, Bell and Telus. The newcomer hopes to differentiate itself from the established network operators by providing better customer service, simpler pricing plans without hidden charges, and less expensive phones. Globalive is currently tendering for network infrastructure vendors and is reportedly down to a shortlist of two.