Calls for fair, transparent process to sale
By Amanda OYE
TORONTO – Canadians are stressed – even more than usual – about their cell phone bills, a new survey conducted by Pollara Strategic Insights says.
A little over half of Canadians reported “being more stressed than usual about their cell phone bill because of inflation,” a press release announcing the survey results yesterday explains. “When asked about the biggest issues that they have with the telecommunications market, Canadians continued to cite high prices compared to other countries (87%) and the lack of competition in the market (73%).”
This survey was commissioned by Globalive, whose founder and chairman Anthony Lacavera (above), has made headlines recently as he tries to buy back another company he founded – Wind Mobile, which is now Shaw Communications’ Freedom Mobile. Freedom is being sold by Rogers Communications as the telecom seeks regulatory approvals to acquire Shaw.
Lacavera believes Globalive is well positioned (if not the best positioned) to put an end to Canadians’ wireless bill woes.
“Over the period of six years … from when I founded the company through to when it was sold to Shaw, prices came down about 21%, which meant a savings of almost $400 per year for Canadian households,” he said during an interview with Cartt.ca. “And Canadians got that savings whether they were a Wind Mobile customer or not … because pricing came down across the board.”
Lacavera wants to make sure this happens again. “We’re the only ones that can make the claim that we actually brought prices down and that we’re ready to do it again,” he said.
Despite his enthusiasm, Globalive is far from the top of the list of potential buyers Rogers has for Freedom – it is not even involved in the sales process in any official way.
“We’re not officially in the process because of the way it’s been handled,” Lacavera said. “But we maintain our enthusiasm and interest and we have made an offer. Our offer stands, it’s a funded, all cash offer for $3.75 billion Canadian dollars.”
The Globalive founder has voiced concerns about the process of the sale to the federal government, making it clear he feels “the process has been non-competitive in every which way.”
Lacavera emphasized he does not fault Rogers for going about the sale as the company has, or for wanting less competition: “they should be trying to do the best thing for their shareholders,” he said.
What he nevertheless wants is for there to be “a fair and open and transparent process where the best bid wins, and it’s the best bid for Canadians, not just the best bid for Bell, Telus and Rogers.”
“Had I not been forced to sell Wind and we just kept going, we would’ve had prices down about 40% by now and Canadians would be paying the same as what people in the U.S. are paying – and that’s what we need to get to” – Anthony Lacavera, founder and chair of Globalive
The best outcome for Canadians, according to Lacavera, would be an independent that will be a competitor – “a truly independent, well capitalized, pure play competitor.”
Asked about reports there is a proposal to buy Freedom from Xplornet currently in front of ISED, Lacavera argued things have not gone well in Manitoba where the company became the fourth carrier in 2017.
“I think that there’s enough history now … where Manitobans have not benefited from the fourth carrier policy because Xplornet was not competing,” he said, adding he thinks it is “the makings of a solution” while also emphasizing the importance of the intent and track record of the future buyer of Freedom.
“We need a true independent that’s well capitalized that ideally has a track record actually competing in mobile somewhere in the world,” he said. “Globalive is the only one that has competed in Canada, but there’s lots of other independents around the world that could come into the Canadian market if the conditions were right.”
Lacavera is hopeful Globalive will be able to buy back Freedom – a company he never wanted to sell in the first place.
“I never would’ve sold it before,” he explained. “I was forced to sell.”
This was due to issues that arose with the company’s capital. “Bell, Telus and Rogers successfully lobbied … that my capital was in breach of foreign ownership rules, and then it led to a protracted legal and regulatory battle that went on for four years. And my investors just never got the approvals that we needed so they just couldn’t continue and so we were forced to sell,” he said. (When Wind Mobile launched in 2009, the primary investor was Weather Investments SpA, which was controlled by Orascom Telecom’s CEO, an Egyptian billionaire.)
“Had I not been forced to sell Wind and we just kept going, we would’ve had prices down about 40% by now and Canadians would be paying the same as what people in the U.S. are paying – and that’s what we need to get to. We need Canada’s wireless prices to be globally competitive,” Lacavera said, adding he does not think it is realistic for prices to drop below U.S. prices because it is still important to have great networks – and because investment in 5G is essential.
The difference for Globalive this time around is “there’s no longer any question about the capital I am bringing in, there’s no longer any question whatsoever that it’s fully compliant,” the company’s founder said, also pointing out the rules around foreign ownership have changed since he founded Wind.
Lacavera has a very hopeful, positive outlook on things – he feels what Canadians want has been well represented, and he believes the government has a good opportunity to address concerns about wireless prices.
“I’m optimistic here … there’s a great opportunity for government to solve this permanently, and I know they’re going to take advantage of it, or I’m confident they’re going to take advantage of it … we’ll just kind of have to see how it goes.”
Image borrowed from Lacavera’s Twitter page.
