Industry Minister Tony Clement has announced today that his government will allow Globalive Wireless Management Corp. to offer cellphone service in Canada.
“We have concluded through normal review that Globalive meets the Canadian ownership and control requirements,” Clement said at a news conference Friday.
The decision comes six weeks after the Canadian Radio-television and Telecommunications Commission (CRTC) denied Globalive’s bid to be a country’s wireless operator. The CRTC initially said Globalive’s corporate structure violated foreign-ownership rules, as Egypt’s Orascom Telecom Holding SAE held too much control through debt financing.
However, under the federal Telecommunications Act, the federal cabinet has the power to overrule CRTC decisions.
Clement said he is satisfied the debt financing provided by Orascom does not constitute foreign control and no changes would be required to the company’s organization. “We are satisfied that in this particular case (Globalive’s) board of directors cannot be controlled by the foreign investor,” he said. “And, in fact, only four of 11 of the board members are nominated by the foreign lender.”
“I firmly believe that Globalive’s entry into the market to provide near national service will enhance competition for the benefit of Canadian consumers,” Clement continued.
Globalive plans to offer wireless service under the brand WIND, which has operated in European markets for 10 years. It has been ready to launch the service in Toronto and Calgary. Maybe as early as next week.
Globalive spent $442 million for the wireless spectrum rights in a government auction.
It will be interesting to hear what Bell, Rogers and Telus have to say about this decision. In the meantime, I believe that Canadians will now have a real choice on who to choose as their wireless carrier. Word on the street is that rates will be lower and service paramount. Prior to the announcement Globalive employees were volunteering their time at places such as Daily Bread Food Bank and other local charities.