And on the flip side, the Canadian consumer should be pissed. We have opened up wireless spectrum to allow for more competition in the marketplace. We need this competition to drive down prices and improve service. We should be in a national uproar that these CRTC hearings are even happening - if Globalive is stopped from entering the Canadian marketplace it's the consumer that will suffer. It's particularly disturbing considering Industry Canada has already approved the Globalive structure.
I did a post a few weeks ago about Globalive, one of Canada's three new cell companies getting ready to launch in the next few months.
Well - with the help of the CRTC, Globalive is back in the news.
The CRTC, apparently the pet dog of Rogers , Telus, and Bell, was let loose to freely attack Globalive. Telus, Bell and Rogers, under the guise of the CRTC, seem to have a bit of a problem with the funding that Anthony Lacavera received to make the bid on the Canadian spectrum, and they are trying to do whatever they can to spoil Globalive's chances of success.
The incumbents all have a good reason to attack Globalive. As reported by the Globe and Mail, upstarts like Globalive, Public Mobile, and DAVE mobile will potentially eat up 24% of the Canadian wireless market by 2014. That's some serious market share, and the incumbents aren't going to lie down and let the new guys steal their lunch.
The biggest problem seems to come down to math. Globalive states that Lacavera is in control, and he is a Canadian citizen. The incumbents are complaining about the amount of ownership and possible influence that the Egyptian financial backer, Orascom Telecom, has on the Globalive company. The way that Lacavera has explained it, the Globalive team is following all the rules while still allowing for some out of this country funding. Here is the breakdown:
- Anthony Lacavera owns 35 % of Globalive, and Orascom owns 65%.
- Orascom funded over $500 Million so Globalive could pay for the wireless spectrum that they bought, and the bridge financing required for the infratructure
- Both of these parties have agreed to replace the loans with third-party investments - as soon as it is commercially viable.
Telus and Bell suggest that Globalive and Orascom are pulling a fast one - trying to get around the legalities by setting up separate companies but still providing Orascom with a majority stake in the company, and also with the added benefit of controlling the operations.
It shouldn't be a big shock that Globalive was financed through another country, and as long as Globalive and Orascom commit to what they say they are going to do, there shouldn't be any problems.
Well - still one hefty problem - the CRTC is under the influence of the incumbents. The decisions coming from this regulatory body will provide fuel for many posts to come.
Am I the only one that sees the irony in the CRTC grilling Globalive about being influenced by outside sources? Isn't this the pot calling the kettle black?
More: You can read about the other two new cellular companies coming to Canada. TheTelecomBlog.com has profiled:
Coming to Canada this Fall - profiling Public Mobile
Coming to Canada this Fall - profiling Wind Mobile
Coming to Canada this winter - profiling Dave Wireless