The Canadian government’s plans to liberalise ownership restrictions for telecoms carriers has sparked a complicated and convoluted legal struggle over licensing rights. Alex Krstajic, CEO of Public Mobile, describes the legal battles as “a flip-flopping” by five different decision makers.
In 2008, Globalive paid C$442 million in a Canadian wireless spectrum auction, and launched wireless operator WIND Mobile in 2009. Much of the controversy has hinged over ownership of Globalive, which received a $700 million loan from Egyptian-based Orascom Telecom around the time of the auction. Although Orascom Telecom does not directly own shares in Globalive, it does hold equity and voting shares.
Canada’s Telecommunications Act has clear restrictions on foreign ownership, and an early challenge was brought against Globalive by Public Mobile and Telus Corp, based on the company’s financing and loan arrangements. The challenge was successful. However, the Canadian government overturned this decision, finding that Orascom could not determine Globalive’s strategic decision-making activities.
When the matter was taken to the Federal Court of Appeal, the ruling endorsed the government decision and found in Globalive’s favour.
The Canadian Industry Minister, Christian Paradis, issued a statement saying: “We have always believed that Globalive is a Canadian Company which meets the Canadian ownership and control requirements under the Telecommunications Act.”
Anthony Lacavera, chairman of WIND Mobile, commented: “This confirms what we have been saying all along – that we are fully compliant with the Telecom Rules. The judges recognised that Cabinet acted properly by both overruling the original CRTC decision and in determining that WIND meets the Canadian ownership rules outlined in the Telecommunications Act.”
WIND Mobile is clearly in buoyant mood after the ruling. Lacavera continued: “Now that this is finally behind us, we are really looking forward to getting back to bringing competition to the marketplace – where it really belongs!”
However, although the battle is over, the war may still continue. Public Mobile stated in a press release that it is seeking leave to appeal the decision, taking matters to the Supreme Court of Canada.
