New wireless company Globalive Holdings said it might have to delay the launch of its mobile phone network after the CRTC decided Monday to review its ownership structure.
The Canadian Radio-television and Telecommunications Commission said Monday it would hold a two-day hearing in September to review the complex corporate structure and financial arrangements of Globalive, which paid $442 million in 2008 for wireless spectrum across Canada with the idea of launching its own national cellphone network.
Globalive chairman Anthony Lacavera said the review could delay the company's plan to have its wireless network up and running in Toronto and Vancouver by the end of 2009. The company had also planned to roll out its network to other areas in 2010.
"While we respect the CRTC's right to conduct this review, we are concerned that a lengthy public hearing process will delay Canadians' overdue access to a new competitive offering," said Lacavera.
At issue is the financial backing Globalive receives from Egypt's Orascom Telecom Holding SAE. Foreign ownership of telecommunications firms is limited to 20 per cent of the voting shares of an operating company and one-third for a holding company.
Industry Canada approved Globalive's ownership, but in April Telus and Shaw Communications called on the CRTC to make that review process more transparent and "immediately initiate" a review of Globalive.
New entrants plan to launch in 2009, 2010
The CRTC responded to the complaints in May by issuing a notice of consultation requesting public comments on whether the commission should review foreign ownership rules in a public hearing or if the existing closed-door procedure is appropriate.
Telus, Shaw, Bell and Rogers all filed comments arguing in favour of public hearings, but other groups, such as the Public Interest Advocacy Centre, said the process would cause unwanted delays.
PIAC also said in its submission that adding another layer of bureaucracy for companies with some foreign ownership goes against the spirit of the government's stated goal for the auction to increase competition. A 2006 Telecommunications Policy Review Panel report argued loosening restrictions on foreign ownership would act to increase competition.
Globalive is one of three companies new to the wireless industry that are expected to launch networks across Canada in the next year.
Public Mobile, backed by several private equity firms, has said it plans to launch a $40 unlimited talk-and-text service in Ontario and Quebec late in the third quarter of 2009, building its network from Windsor to Quebec using a block of spectrum it acquired at the auction that other players, including the incumbents, chose to ignore.
Toronto-based Data & Audio Visual Enterprises Wireless Inc., or DAVE Wireless, the wireless company headed by entrepreneur John Bitove, has said it plans to launch service in early 2010 for Toronto and expand to other cities shortly thereafter.