My Cellphone My Terms

Globalive  a  National Player

In a rather unexpected decision Ottawa via Industry Ministry Tony Clement, rejected the CRTC ruling that Globalive Wireless was offside regarding its foreign ownership stake. Foreign ownership rules require telecommunication companies to have majority ownership that is Canadian and requires that its board reflects this representation.

Globalive had earlier adjusted its equity stake and board representation to reflect this fact. As a result of this they were given the green light by Industry Canada to go ahead but this was subsequently blocked by the CRTC.  From the CRTC’s perspective, this notion of “Controlling Fact” meaning who truly controls the organisation is a subjective interpretation. Since Globalive’s partner Orascom Holdings had a significant equity and debt stake in the company, it can wield more control that the makeup of the company would suggest. While this may be so, the legal requirement in terms of ownership makeup was held up by Globalive. Not to mention that each of the incumbent wireless carriers have a significant debt and equity holding from foreign holders. The main difference however, is that for the incumbents there isn’t a single investment with a majority holding in equity and debt and this is the source of conflict. Does Orascom have enough say to control Globalive Wireless or Wind Mobile? You decide.

Regardless of these facts, Wind Mobile can now enter the market as early as next week. But look for them to be full fledged in Q1 2010 given the time lost it would almost impossible to get ready for the holiday season, but anything is possible. Nonetheless, this decision makes the most political sense. Canada wants a shakeup in the wireless industry and Globalive is the only true national player that can do this, they’ve already hired over 800 employees – many of whom have been using their spare time doing random acts of kindness and helping out in the community – they’ve already built most of the network (with the exception of Quebec) and they’ve already paid over 400 million for spectrum licenses. Quite a hefty investment if you ask me. So it’s only natural that Ottawa given the state of the economy and the precedence set by Industry Canada to overturn the CRTC ruling. Let’s face it who will want to have 800 employees back on the streets in this economy.

So Canadians you can now expect a few things. A shakeup of the wireless oligopoly, more competitive offers as Wind comes out with its unlimited bucket plans similar to MetroPC in the US.  And a more aggressive incumbent response, largely from their flanker brands like Fido, Koodo, Solo and Virgin. But it will be an interesting ride.

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