TORONTO: Canada s telecom regulator said Thursday that startup wireless carrier Globalive does not comply with Canada s ownership standards because it is majority funded and controlled by Orascom, an Egyptian telecom company.
Egyptian billionaire Naguib Sawiris and Canadian entrepreneur Anthony Lacavera, founder and chairman of Globalive, are behind the Toronto-based upstart, which will now have to delay the launch of its mobile phone service due to the ruling.
Orascom owns 65 percent of Globalive, a structure that was accepted by Industry Canada when its license was granted last March. Orascom also holds much of Globalive s debt.
However, the Canadian Radio-television and Telecommunications Commission said Thursday that Orascom, a non-Canadian company, has the ongoing ability to determine Globalive s strategic decision-making activities.
Given Orascom s equity interest in Globalive, such a high level of debt in the hands of a non-Canadian is unacceptable.
Under Canadian regulations, telecom carriers must be majority-owned and controlled by Canadians.
Lacavera had maintained the company was fully compliant with foreign ownership and control regulations after making changes to its structure that restricts Orascom s influence on its operations.
Having already received approval from Industry Canada, we are extremely disappointed that the CRTC has come to a different conclusion, said Lacavera.
This is a bad day for Canadian consumers. Canadians deserve competition in wireless and this decision represents a major step backwards.
Globalive wanted to be Canada s fourth major wireless carrier and compete with Rogers, Bell, and Telus.
But the three carriers had said Globalive was breaking the Telecom Act because it was under foreign control.
Telus applauded the decision and said it upholds Canadian regulations on foreign ownership and control.
We don t think the CRTC had any choice or latitude under the laws of Canada to make any other decision, said Michael Hennessy, senior vice president of regulatory and government affairs.
Telus noted the decision does not shut out Globalive from the cellphone market.
It merely means they must abide by Canada s laws, Hennessy said.
If the federal regulator had ruled Globalive could enter the Canadian cellphone market as it is currently structured, it was expected that Globalive would launch in Calgary and Toronto next month. The upstart had hoped to operate under the WIND Mobile banner and have a presence everywhere in Canada except Quebec, the country s French-speaking province- AP
