Fourth Wireless Phone Provider to Enter Canadian Market

[M.Dancer]

http://www.theglobeandmail.com/report-on-business/globalive-to-enter-wireless-market/article1396853/

Ottawa has rejected a regulatory decision and allowed Globalive Wireless Management Corp. to enter Canada's wireless market, dominated by three players.

Industry Minister Tony Clement said Friday the federal cabinet decided to “vary” an October ruling by the Canadian Radio-television and Telecommunications Commission that Globalive could not enter Canada because it violated ownership rules, finding the majority of its equity and almost all of its debt is owned by an Egyptian company, Orascom Telecom Holding.

Mr. Clement said 80 per cent of Globalive's voting shares are controlled by Canadians, and just four its board members are those nominated by foreign interests.

The Canadians operating this provider have been active in Canada for awhile offering discount Long distance and internet...

In an interview with Bloomberg News Thursday, before the decision, Rogers chief executive officer Nadir Mohamed warned that the wireless market could not sustain a fourth national service.

“There's no question in my mind that Canada cannot support more than three national facilities-based players,” Mr. Mohamed, who runs the country's biggest mobile phone service, told the news agency. “It's inconceivable to me.”

Well, he may be right. If the market cannot support 4 players, then it will self correct. But the decision on which players survive should not be the CRTC's, it should be left up to consumers like you and me.

“If Canadians had realized how much they had been missing out on when Globalive was rejected, they would have been very upset,” said Canaccord Adams analyst David Lambert.

“These guys have national coverage from Day 1, three data centres, they've managed to get 475 cell sites in the last nine months and have kiosks inside of Blockbuster stores. I think there are many ways they'll undercut prices, especially from Rogers.”

Canada has some of the most expensive wireless rates in the world. That is about to change.

[August1991]

Having four players is better than having three but it's still a small club. It's worth pointing out that we used to have four players until Rogers bought Fido so we're just back to where we were before. (Videotron will soon launch in Quebec making a fifth player. Globalive/Yak will not offer service in Quebec.)

IMV, it is more significant that the Minister overruled the CRTC and basically re-interpreted the foreign ownership provisions. In effect, this turns Canada's cellphone market into a contestable market.

If the players in Canada believe that foreign firms might enter our market, this threat alone will keep them in line.

Last result. This result stems from Maxime Bernier's decision to open up new bandwidth to cellphones. I wouldn't be surprised to see him back in the cabinet before the New Year.