OTTAWA and TORONTO – For a guy whose new company is about to jump into the competitive world of mobile communications – but only after it has been scrutinized in a very public review by the CRTC – Globalive Holdings chair and CEO Anthony Lacavera seems pretty relaxed.
Calling the upcoming review of Globalive’s ownership and control “fairly standard procedure”, Lacavera told Cartt.ca that his only moment of concern came when he read that the CRTC could take up to 120 days after the close of the hearing in September to render a decision, which could have pushed back his launch plans. The Commission has since revised that time frame to within 30 days, which he said would most likely not affect the launch.
“It’s great that the CRTC has amended the time frame (of their decision),” he said in a telephone interview. “We were fairly alarmed when we first saw the notice, but now that it has been clarified, the storm has passed”.
As Cartt.ca readers are aware, Globealive Wireless is one of the three new wireless newcomers planning to enter the Canadian market in the next year. It has announced plans to launch in Toronto, Ottawa, Vancouver, Calgary and Edmonton either later this year, or in early 2010.
The company paid $442 million for its spectrum licences at last summer’s wireless spectrum auction, and said that it will spend between $300 million and $600 million on its wireless network infrastructure, a GSM network that will cover all of Canada, excluding Quebec. It already offers the Yak long distance product, VoIP and third-party ISP services.
If Lacavera is concerned that the Commission chose to take the uncommon step of conducting Globalive’s ownership review in public, he’s not letting it show.
“That did come as a bit of a surprise for us,” he admitted. “But we’ve already been through this with Industry Canada, and don’t anticipate any major issues”.
Globalive is backed by Egyptian-based wireless company Orascom Telecom Holding, an international telecommunications company operating GSM networks in the Middle East, Africa and South Asia. The company, which had over 79 million subscribers as of last September, holds a 65% indirect equity ownership, but less than 50% of voting control in Globealive Holdings, the parent company of Globalive Wireless.
But it’s that ownership structure that appears to have some of the incumbent telcos concerned.
“When someone has 65% equity, they expect to control that equity”, Michael Hennessy, Telus’ SVP of regulatory and government affairs told Cartt.ca. “It is very clear from the investment presentations that we’ve seen that they (Orascom) manage companies on a day to day basis. It’s a simple matter of fact – that’s the way that business operates. It is critical to determine whether the ownership laws are being met here.”
Telus, with support from Shaw, petitioned the CRTC in April asking it to “initiate an open and transparent process to review whether Globalive Wireless Management Corporation (Globalive) is under Canadian ownership and control as is required by section 16 of the Telecommunications Act”.
The Telecommunications Act considers a corporation Canadian-owned and controlled if:
– not less than 80% of the members of the board of directors of the corporation are individual Canadians;
– Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than 80% of the corporation’s voting shares issued and outstanding; and
– the corporation is not otherwise controlled by persons that are not Canadians.
“There has to be only one law and set of rules for everyone”, Hennessy continued. “You can’t disadvantage the incumbents. We are asking for transparency and fair application of the law. It is the law.”
Lacavera shrugs off the comments, saying criticism from the incumbent telcos is not a surprise.
“We really are different and are creating a dynamic that has the incumbents concerned. We are offering a new choice, a real, true new choice to Canadians, and if anything, that (criticism) makes it all the more of a challenge for us. It’s always been a tight club.”
It will up to the CRTC to determine whether Globalive is Canadian enough to proceed. The Commission has scheduled the public review for Sepetmber 23 – 24, 2009.
“The onus is on the government to prove why the obvious is not the case in this particular situation,” Hennessy said.
“Our plans are very solid”, Lacavera added. “Our network and service levels will be at least as good as the incumbents.”
