The Globalive Saga – Why Can’t There Be A Fourth National Wireless Provider In Canada

Things are getting hot in the Canadian wireless industry with the continuing Globalive saga. Globalive, a Toronto-based company, has been eager to launch a national wireless service called Wind Mobile. Whatever their offering, at the end of the day choice is good for consumers. But its not being allowed to happen (at least for now) as it has run into opposition from the established carriers and outdated regulations. Free market ? Not here in the Canadian wireless industry, yet. Here’s some background:

In Canada, there are three main wireless carriers, TELUS, Bell and Rogers, and a bunch of other regional players. Some time ago, the government decided that it will be a good idea to have more competition in the market and decided to make some wireless spectrum available for sale. The idea was that Canadian companies will buy that spectrum and offer their own wireless services on it – with the end result being more choice for the consumer. Sounds good, right ? 

A company called Globalive went ahead and poured roughly $443 million in buying a chunk of that spectrum. They developed their service offering and have been getting close to launch recently. There were some concerns regarding the company not being “Canadian” enough – but Industry Canada took a look and ruled that it, infact, was Canadian-owned, and as a result Globalive kept moving along in its plans to offer this competing service to Rogers, Bell and TELUS.

Surely a moment to rejoice for Canadian wireless subscribers. No matter how good the existing players are, more competition would mean that the companies would have to fight harder to keep their customers’ business – from better pricing to better customer service. Canadian consumers win at the end of the day. That math is not hard.

But someone somewhere (guess who..) felt threatened enough by this to complain to the CRTC, the Canadian Radio-television Telecommunications Commission, that “hey, take another look at Globalive and its ownership”. CRTC ruled recently that Globalive does not have enough of a Canadian ownership to satisfy the commission and as a result cannot be allowed to launch its wireless service in the market. So long for healthy competition in the market..

Different branches of the same government have different opinions on the matter, and Globalive’s hopes rest with the Industry Minister now. The existing carriers are of course contending that Globalive is not Canadian and shouldn’t be allowed. Nadir Mohamed, the CEO of Rogers, spoke about the issue today while giving a speech at the Toronto Board of Trade where he emphasized that competition is good for consumers and he supports that and there are other local wireless companies emerging like DAVE Wireless and Public Mobile, but Globalive is a separate case as “rules should be followed” and not subverted for any one company. He also said that if Globalive is not able to launch, then its spectrum should be made available for sale as its a precious asset and his company would be interested in acquiring that.

How Ottawa deals with Globalive and whether it is Canadian-enough to offer a wireless product here remains to be seen…but I’m wondering even if what it isn’t ? Shouldn’t we as Canadian consumers be a little happy that someone wants to sell their product here and we get more choice as a result ? Would it be a terribly bad thing if foreign companies are allowed to compete in the Canadian wireless market ? The sugared water we drink – we choose from between US-based Coke and Pepsi. The junk food we eat – again the likes of US-based McDonald’s and Burger King. Email systems – again either from a US-based GMail or Yahoo or Hotmail. What about choice in the wireless industry, and how do Canadians benefit if only a limited number of Canadian companies are allowed in the market ? Won’t you like to see the likes of AT&T, Verizon, Sprint and T-Mobile fighting for a chance to get your business, alongwith TELUS, Bell and Rogers or even Globalive ?

Heck, I’m paying way more for similar wireless services here compared to my friends in the US, and the only good reason for that is because the Canadian wireless market is closed – the incumbents have been able to lobby successfully to keep stronger competition out and as a result keep prices higher. I’m sick of paying exorbitant charges and cooked-up fees and in a free market system, I’ll have better and more choices. More innovation, lower prices, better customer service. That’s what I want as a consumer, and I guess some other folks would too.

What do you think ?