Will Globalive and WIND Mobile be the rule instead of the exception? Throne speech signals change in telecom industry foreign ownership rules (Photo: The Canadian Press)
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The government signalled in the throne speech Wednesday it is opening key sectors, including the satellite and telecommunications industries, to both venture capital and investment from outside the country.
The move is not entirely a surprise, given that Industry Minister Tony Clement recently overturned a CRTC ruling that disqualified a new entrant into the wireless market, Toronto-based Globalive Wireless, for being too foreign owned.
Globalive, effectively controlled by an Egyptian company, has been selling its Wind Mobile wireless services since Christmas.
But now the Harper government appears ready to make the Globalive precedent the rule rather than the exception.
"Our government will open Canada's doors to venture capital and to foreign investment in key sectors, including the satellite and telecommunications industries, giving Canadian firms access to the funds and expertise they need," the document states.
Further details are expected in Thursday's budget, but industry analysts say the policy shift could harbinger great changes in Canada wireless market.
Critics of the current system say Canadians pay significantly more for wireless services than Europe, which allows foreign competition. Canada's wireless market is currently dominated by three players: Bell, Rogers and Telus.
As of now, corporations operating as telecoms must meet the following requirements:
• At least 80 per cent of its board of directors must be individual Canadians.
• Canadians must own at least 80 per cent of its voting shares.
• The corporation must not be otherwise controlled in fact by non-Canadians.
• At least two-thirds of the voting shares of a carrier's parent company must also be held by Canadians.
Even if no new foreign player materializes, the loosening of the rules that require majority Canadian ownership and control would allow entrants to seek more financing outside the Canada's borders.
You're insane if you think things will get better for cell phone customers. If anything, they'll get worse.
It is about time ,I am sooo tired of high prices and poor service , competition is a good thing for the citizens and bad for corporations .
Awesome!!! I expect we will see new companies because of this movie. Soon I will finally have a cellphone!