Globalive cleared to launch as government overturns regulator’s decision

14 Dec 2009

Canada’s Industry Minister Tony Clement on Friday announced that start-up mobile operator Globalive Wireless meets Canadian ownership and control requirements under the Telecommunications Act, overturning a ruling by telecoms regulator the CRTC. The result of a government review clears Egyptian-backed Globalive to launch its services as early as this week under the Wind brand. Globalive chairman Anthony Lacavera told CBC News that the company was ready to launch immediately in Toronto and Calgary, although no official date was confirmed. Globalive previously scheduled commercial launches cities in all areas of the country except Quebec in early 2010. Clement confirmed that permission to enter the market was ‘effective immediately’ and that Globalive, 65%-owned by Orascom Telecom, did not need to make any changes to its ownership structure, adding that the ruling was a one-off that would not alter existing foreign ownership laws. The decision is the second occasion in recent times that a major policy judgement by the CRTC has been overruled by Industry Canada; TeleGeography’s GlobalComms Database notes that in December 2006 the ministry threw out the regulator’s existing policy on competition in local fixed telephony services and replaced it with a new strategy to accelerate deregulation in that market, which also went against the guidance of a parliamentary committee.

Reaction to the decision was negative from existing national wireless providers, whose lobbying had led to the CRTC investigation of the structure of Globalive’s ownership, which technically meets legal requirements on the basis of Canadian-held voting shares. Nadir Mohamed, CEO of Rogers Communications, told Bloomberg that ‘there’s no question in my mind that Canada cannot support more than three national facilities-based players… It’s inconceivable to me.’ As reported by the Montreal Gazette, a Bell Mobility spokesperson said: ‘We think Globalive clearly does not meet the requirements for Canadian control… We’ll be taking a close look at the reasoning behind this decision,’ whilst Michael Hennessy, vice-president of regulatory and government affairs at Telus, expressed ‘surprise’ that the government ruled in favour of Globalive without asking for any changes to its ownership structure. ‘I think it’s an interpretation that comes back and bites hard in the potential precedent it has set,’ Hennessy said, adding that ‘the cabinet has inadvertently opened up a Pandora’s box in how foreign ownership of these sectors is dealt with in this country. It may lead many people to consider challenges of the decision in court.’ He indicated that Telus was looking at the option of pursuing legal action over the issue.