CRTC says Globalive fails Canadian ownership test

Canada’s telecom regulator has determined that Globalive does not meet Canadian ownership rules. Globalive is hoping to enter Canada’s wireless industry as a new cellphone startup, however it is mostly funded by Egyptian telecom company Orascom – which is a problem for the Canadian Radio-television and Telecommunications Commission (CRTC).

Over the last few weeks, Globalive tried to change the structure of its operations to meet ownership standards in Canada but the CRTC determined today that the changes weren’t enough.

Globalive chairman Anthony Lacavera issued a written statement on the decision, calling it “a bad day for Canadians and wireless competition in Canada.” Lacavera suggested the company, which proposes to operate under the brand name Wind Mobile, is only delayed in starting up and noted that Industry Canada had given its approval to Globalive.

Orascom owns 65.1% of the equity in Globalive. Under CRTC rules, a Canadian carrier is eligible to operate as long as it is a Canadian-owned and controlled corporation. To meet this test, at least 80 per cent of the members of the board of directors must be Canadian, at least 80 per cent of the voting shares must be owned by Canadians, and the company can’t be indirectly controlled by non-Canadians, through other methods such as holding companies.

In recent weeks, Lacavera had been reworking the arrangement with Orascom in an effort to appease the CRTC. Globalive’s board structure was changed, and the company raised the threshold for Orascom using any veto over company decisions. Apparently the changes weren’t enough.

Let’s hope Globalive gets approved soon as I’m looking forward to more Wind Mobile commercials.