OTTAWA and TORONTO – The CRTC’s decision which derailed wireless challenger Globalive’s plans to launch in Canada has also served to put a “regulatory gun to our head”, says chairman Anthony Lacavera.
In an interview Wednesday with Cartt.ca, the head of Globalive Wireless Management, the Canadian parent of Wind Mobile, said that the Commission has handicapped his Toronto-based company from sourcing Canadian financing.
“The CRTC said in the decision that they wanted us to deal with the debt, but they didn’t say how, and we have an issue with how ambiguous that is. But, they’ve also put us in the position where every institution that we’ve talked to knows that we can’t launch without resolving it, so we’re unable to negotiate commercially reasonable terms. They’ve essentially put a regulatory gun to our head.”
Lacavera said that lack of interest from Canadian investors prior to last summer’s wireless spectrum auction is in part what lead him to develop the partnership with Egyptian telco giant Orascom Telecom Holding SAE. Globalive paid $422 million to acquire mobile licences in all provinces except Quebec.
“We stressed to the Commission that we have tried to seek financing alternatives, but that the Canadian capital market is really not up for tech and telecom, and it will take time for us to resolve”, he continued. “That’s what I’m personally most unhappy about. Now we’re in a position that not only can we not launch and bring Canadians the first real choice in wireless in over a decade, but we’re also further hamstrung by this artificially distressed situation that’s been created by the CRTC with respect to our financing.”
Despite, or perhaps in light of, a promise from Industry Canada to review last week’s CRTC decision, Lacavera said that the 10 year old company is still assessing all of its options before announcing a “definitive action plan”.
And for the short term, it’s business as usual for the company’s approximately 800 staff who are split between its corporate office on Toronto’s waterfront, and two call centres in Mississauga and Peterborough, ON.
“We actually have all kinds of financial capacity to move forward and launch”, Lacavera continued, noting that Orascom has to date invested only $500 million of the $700 million that they committed to Globalive. “We have no need for additional financing, but the Commission has imposed this restriction that we feel is totally unreasonable, and so onerous that it puts the whole competitive opportunity that we’ve created at risk.”
But Lacavera said that he’s not prepared to throw in the towel any time soon. Describing his company as a perennial “underdog”, he vowed to “fight this”.
“We’ll get there”, he said optimistically.
