The Canadian Radio-television and Telecommunications Commission, our wireless regulatory north of the border, has just put the brakes on wind Mobile’s planned launch this November over concerns of Canadian ownership. You see, 65% of the parent company, Globalive, is owned by an Egyptian telecom called Orascom, and according to the CRTC, that weighs too heavily on wind‘s day-to-day dealings. Specifically, the Telecommunications Act states that a carrier must fullfill three criteria to operate:
(a) not less than eighty per cent of the members of the board of directors of the corporation are individual Canadians;
(b) Canadians beneficially own, directly or indirectly, in the aggregate and otherwise than by way of security only, not less than eighty per cent of the corporation’s voting shares issued and outstanding; and
(c) the corporation is not otherwise controlled by persons that are not Canadians.
Industry Canada had already looked into this very ownership issue and given the green light for Globalive to own a chunk of the wireless spectrum on auction. Rogers, Telus and Bell don’t want any more competition, and considering wind‘s frankly revolutionary approach to customer service combined with their decent handset lineup, they stand to put up a good fight versus the incumbents. These ownership problems apparently didn’t stop Globalive’s ISP and landline property, Yak, from setting up shop, so what gives?
Well, let’s take a look at the full report. There are three main points that, when combined with the fact that Orascom will be handling Globalive’s debt, the CRTC has determined would allow them to control wind: Orascom “holds two-thirds of Globalive’s equity; is the principal source of technical expertise; and provides Globalive with access to an established wireless trademark.” The report states that there have already been a lot of good structural changes made, and that if Globalive makes a few more to address these points, wind has a good chance of taking off.
That means fixing the situation might be as easy as taking on more Canadian investors to reduce Orascom’s ownership from 65% to 20%, changing the name, and making local wireless partners (Nortel, maybe?). Part of me wants to applaud the CRTC for making sure the revenue generated from a Canadian carrier stays in Canada, and part of me wants to punch them in the face for delaying (and possibly killing, if the additional changes are insurmountable) what could be Canada’s sole glimmering hope for legitimate wireless competition in the near future. If you’re piping angry and want to give the CRTC a piece of your mind over the decision, there’s an online petition over here, or you can show your support in wind‘s blog. Globalive is currently looking at placing a federal appeal, so there’s hope yet.