Canada's entrenched wireless carriers trying to stifle International competition
Kevin William Grant
Published on
December 31, 2020

Globalive's chairman and CEO said Thursday that rivals of his company's new Wind Mobile wireless service are "fear-mongering" with complaints about its foreign investors.

Anthony Lacavera, who heads Canada's newest national wireless carrier, said Thursday that the industry's three established players - Rogers, Bell Mobility and Telus - are trying to stifle competition within the country and are using Wind Mobile as a target.

The new arrivers are using this very important question of Canadian sovereignty and culture... in order to actually create an issue with respect to telecom's infrastructure.

Wind Mobile has major investment from Egyptian-based Orascom Telecom Holding, which has caused some of Wind's rivals to complain that it doesn't qualify under Canadian ownership rules.

In his speech, Lacavera insisted Wind has safeguards in place to ensure the company is under Canadian control. He encouraged Ottawa to ease some of its regulations, allow more foreign capital investments and loosen foreign ownership rules in the wireless sector to boost competition and encourage technological innovation.

"I am a very proud Canadian who believes that we can do better," he said.

Lacavera made his case as fellow competitors Rogers Communications (TSX:RCI.B), BCE Inc. (TSX:BCE) and Telus (TSX:T) met in front of a parliamentary hearing in Ottawa to reaffirm their opinion that, if any restrictions on foreign control are eased, they must be done equally so that all carriers - including cable TV companies - get the same treatment.

They said the country's wireless giants are all carriers for an array of media, including phone services, data transfers and television programming.

Map of Canada and Telecom Logos

Michael Hennessy, Telus' senior vice-president of regulatory and government affairs, said after the hearings that the carrier isn't opposed to opening up the rules.

"Telus has no objection to the removal of the foreign ownership restriction, as long as it's done on a symmetrical basis for cable and telecommunications carriers," he said.

That means, "no special deals for new entrants, or for foreign carriers like AT&T and Verizon," he added.

"We all play for the same rules."

Globalive has been on the defensive since last fall when the federal government overturned a previous decision by the country's broadcast regulator. The CRTC had initially concluded that the Egyptian-financed company wasn't Canadian enough to sell its services in the country, but the government decided to let the company compete in the Canadian wireless market.

"To call us anything but Canadian would, quite simply, be untrue," Lacavera said in his speech.

"But that's the kind of fear-mongering that the incumbents would like to seed in order to continue their anti-competitive hold on the Canadian telecom market."

Telus's Hennessy defended his company's position against Globalive's claims.

"Obviously we're not a fear monger if we're standing up and saying 'Take the rules off for everybody,"' he said.

"Given that the CRTC, after an open and transparent hearing, found that Globalive was not eligible on his current structure, that's not fear mongering. That's just straight-up transparent legal remedy, which while it was later overturned, was overturned in a manner that at the time was quite surprising."

Foreign ownership rules restrict indirect control to 46.7 per cent of a Canadian telecom company, or 20 per cent direct ownership of its shares under the current rules.

On Tuesday, CRTC chairman Konrad von Finckenstein told a House of Commons committee that if any changes were to be made to the rules, foreigners should be restricted to a maximum 49 per cent of controlling shares in any telecommunications firm.

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