The CRTC is reviewing the structure of Mobilicity, the fledgling cellphone provider formerly known as DAVE Wireless, to see whether it meets Canadian-ownership rules.
The Canadian Radio-television and Telecommunications Commission told the Toronto-based company in a letter last week that its ownership structure is complicated enough to warrant the review.
"At this time, and based on the information available, the commission considers that the ownership structure of DAVE Wireless is of a sufficiently complex nature and that it holds precedential value for the industry and the general public," the regulator said.
The CRTC in October turned down an application from Toronto-based Globalive Communications to start up its Wind Mobile service after conducting a full, public review only to have its decision overturned by the federal government in December.
The Mobilicity review will be a lesser investigation, known as Type 2, rather than Globalive's Type 4 review. It will not be open to the public, and the CRTC won't be accepting submissions from third parties.
The regulator said Mobilicity appears to meet the legal control requirements in the Telecommunications Act, with 67 per cent of the voting shares being held by Canadians and the largest non-Canadian investor providing less than 55 per cent of the company's capital.
However, Mobilicity has a "significant debt facility" through a foreign bank to fund the purchase of its telecommunications equipment, so the CRTC must examine whether the company is controlled "in fact" by Canadians.
A spokesperson for the company could not be immediately reached for comment.
Mobilicity is controlled by Toronto entrepreneur John Bitove, who won wireless licences in several major Canadian cities in a 2008 auction with a company named Data & Audio Visual Enterprises (DAVE) Wireless. The company officially announced in February it would offer service under the Mobilicity brand, with a Toronto launch scheduled for the spring. It is also planning to launch service in Ottawa, Vancouver, Calgary and Edmonton later this year.
The CRTC has also previously announced it is investigating the ownership and control structure of Public Mobile, another Toronto-based company that plans to launch wireless service in Ontario and Quebec this year.
Wind Mobile, the first of the new providers, has taken some lumps since launching in December. The company last week announced the departure of Chris Robbins, its chief customer officer, while customers in Toronto and Calgary have complained about holes in coverage. Wind also began offering new customers $150 credit if they cancel their contracts with existing providers and make the switch.
A recent report from the SeaBoard Group, a telecommunications consultancy, said Wind launched service prematurely.
"Why are these announcements important? They suggest that the company’s performance is not going according to plan," the report said. "We believe that it shows evidence of a company under extreme pressure to get to market before it was fully ready and of a flawed launch plan."