CRTC to review another wireless startup

Just 10 days after its Globalive ownership review decision was overturned, Canada’s telecommunications regulator has announced it will review a second new entrant to the wireless industry.


The Canadian Radio-television and Telecommunications Commission said it would conduct a review of Toronto-based Public Mobile Inc. to determine if the company meets the Canadian ownership rules in the Telecommunications Act. But unlike the CRTC’s public hearing on Globalive Wireless Management Corp. earlier this year, the federal regulator will debate the issue behind closed doors, without accepting submissions from any third-party.


“The Commission considers that the ownership structure of Public Mobile is of a complex nature and could hold precedential value for the industry and the general public,” stated in a letter to Public Mobile on Friday. “The Commission does not consider, however, that the evidentiary record would be improved by third-party submissions.”


The CRTC added that a preliminary review of the documentation filed by Public Mobile suggests the company “appears to comply” with Canada’s legal control requirements.


In a statement to ComputerWorld Canada, Public Mobile CEO Alek Krstajic said he expects the CRTC to rule “very quickly” and determine the company is Canadian-controlled.


“A CRTC review of this nature has been anticipated by Public Mobile as part of the regulatory review process,” he said. “Public Mobile has a large percentage of Canadian shareholders and corporate governance that meets existing standards.”


The Ontario Municipal Employees Retirement System (OMERS), one of Canada’s largest pension funds, is providing the majority of Public Mobile’s funding after making a $50-million investment in the startup.


Jayanth Angl, senior research analyst at London, Ont.-based Info-Tech Research Group Ltd., said that because these ownership reviews were instituted as a requirement during last year’s spectrum auction, the CRTC’s announcement is far from surprising. He added that the situation with Public Mobile isn’t nearly as contentious as the Globalive debate, with the CRTC even admitting that the review is probably just a formality.


“It’s clear there’s significant Canadian financing,” Angl said.


Angel expects that Public Mobile should be very prepared for any ownership review considering it supported the CRTC decision which prevented Globalive’s launch. “They wouldn’t be throwing stones if they weren’t ready themselves,” Angl said.


In October, the CRTC found that because Egypt-based Orascom Telecom S.A.E. held 65 per cent of Globalive’s equity, almost all of its debt, a $100-million services contract and control of the Wind Mobile brand, that the Egyptian company in effect ran Globalive.


The ruling stopped Globalive from launching until Dec. 10, when. to the surprise of many telecom industry observers, Industry Minister Tony Clement overruled the CRTC decision and gave Globalive clearance to launch.


Following its review of Public Mobile, the CRTC is expected to undertake a similar process for Toronto-based DAVE Wireless Inc.

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