“Globalive does not meet Canadian ownership rules”

The CRTC just sent out a press release about Globalive foreign ownership and stated “Globalive does not meet Canadian ownership rules”. We caught up with Tony Lacavera, Chairman of Globalive tonight… check out the phone interview (make sure your volume is turned up though).

“The Canadian Radio-television and Telecommunications Commission today determined that Globalive Wireless Management (Globalive) does not meet the Canadian ownership requirements set out in the Telecommunications Act. Under the legislation, a telecommunications company is only eligible to operate in Canada if it is not at any time owned and controlled, in law and in fact, by non-Canadians.

During its proceeding, the Commission examined the influence of Orascom Telecom Holding (Orascom) over Globalive’s business decisions and day-to-day operations. Despite the fact that Globalive made significant structural changes to reduce its dependence on Orascom, there were other factors that, taken together, led the Commission to conclude that Globalive does not meet the statutory test.

The Commission found it particularly important that Orascom owns 65.1 per cent of the equity, has entered into a strategic technical arrangement with Globalive, controls and holds the “Wind” brand under which Globalive will operate, and holds the overwhelming majority of the outstanding debt.

Globalive is a new company seeking to enter the Canadian wireless market. The Commission focused on the set up and operations of Globalive in the context of a company rolling out a national wireless network. In its decision, the Commission identified the areas that need to be addressed in order for Globalive to meet the Telecommunications Act’s Canadian ownership requirements.”

On the Wind Mobile website they have responded by writing a post titled “A Bad Day for Canadians and Wireless Competition in Canada” and it states “WIND Mobile will be delayed in becoming Canada’s newest competitive wireless operator…In its decision, the CRTC came to a different conclusion than Industry Canada and has indicated that Globalive Wireless is not in compliance with the Canadian ownership and control requirements set out in the Telecommunications Act.

Anthony Lacavera, Chairman, Globalive Wireless Management Corp. said “Having already received approval from Industry Canada, we are extremely disappointed that the CRTC has come to a different conclusion. This is a bad day for Canadian consumers. Canadians deserve competition in wireless and this decision represents a major step backwards.”

Ken Campbell, CEO of WIND Mobile stated “WIND Mobile had planned to launch in the coming weeks. We have pulled together an excellent team of more than 500 people and had built a strong network and operation across the country. We are ready to bring competition to the market. We will be evaluating our options on how to proceed.”

How do you feel about this news?