October 29th, 2009
Start up cellular provider Globalive denied license to operate in Canada
In a stunning victory for Bell Canada, Telus and Rogers, the CRTC denied new start up Globalive a license to operate as a telecommunications (cellular) service provider in Canada. Over the past month the CRTC held hearings whether or not Globalive met ownership rules required to operate as a carrier. The commission’s hearings today determine that it did not. In a press release issued this afternoon:
The Canadian Radio-television and Telecommunications Commission today determined that Globalive Wireless Management (Globalive) does not meet the Canadian ownership requirements set out in the Telecommunications Act. Under the legislation, a telecommunications company is only eligible to operate in Canada if it is not at any time owned and controlled, in law and in fact, by non-Canadians.
Orascom is one the largest cellular players in the Middle East, Africa and parts of Europe and is based in Eygpt. Managed by CEO Naguib Sawiris, he and Canadian CEO of Globalive Tony Lacavera believed that majority financial investment did not translate into the mandatory Canadian ownership Laws.
Canadian Law requires majority control of the company be Canadian controlled. The CRTC stated:
The Commission found it particularly important that Orascom owns 65.1 per cent of the equity, has entered into a strategic technical arrangement with Globalive, controls and holds the “Wind” brand under which Globalive will operate, and holds the overwhelming majority of the outstanding debt.
Orascom has invested over 400 Million (Cdn) into the new company’s cellular operations which are to be called Wind, which is also Orascom’s European brand.
All three major incumbent players, Bell Canada, Telus, and Rogers, aggressively argued that Globalive was not a Canadian controlled entity, submitting strong evidence and regulatory requirements were being sidestepped under illegal pretenses. The CRTC commission agreed with just about every argument the three made during hearings in September.
No public announcement has yet been made by Globalive appealing the CRTC’s decision. Several options are possible including bringing in a majority Canadian financial interest into the company. The CRTC did not mandate Globalive to halt construction on any of the towers that they have currently being built.
