Globalive Wireless has vigorously attacked the country’s incumbent wireless carriers for “opposing us every step of the way” before it can open its doors for business.
After hearing hours of complaints from Bell Canada, Rogers Communications and Telus Corp. to regulators that Egyptian-based co-owner Orascom Telcom runs the startup, Globalive executives lashed back Thursday.
Allegations Orascom pulls its strings are “divorced from reality,” Globalive Wireless CEO Ken Campbell told the Canadian Radio-television and Telecommunications Commission in Gatineau, Que.
“The idea that anyone other than my team and I are running this business is inaccurate and offensive.”
Globalive hopes to go into business before the end of the year under Orascom’s Wind Mobile brand. With licences covering most of the country except southern Quebec and hundreds of millions of dollars from Orascom, it could mount a serious threat to the incumbents.
Industry Canada has already approved its ownership structure, but the CRTC has to approve its carrier licence. Under the Telecommunications Act non-Canadians cannot control a carrier.
While Orascom is a minority shareholder with 32 per cent of the votes in Toronto-based Globalive’s holding company, there are questions about Orascom’s power in the partnership. Orascom, which has interests in cellular companies around the world, has lent Globalive more than $500 million, owns 65 per cent of its shareholder equity and has a $100 million services contract.
That combined, argue the incumbents, gives Orascom the whip hand.
So as the CRTC’s public phase of its hearing ended Thursday, Globalive pulled out all the stops to confront any criticism.
In addition to making major changes to its original structure, that included suggestions that Globalive is close to getting on the air: Campbell said it has just made its first test call, in Ottawa, erected its first transmission tower in Calgary and is hiring sales staff for stores in Toronto. The company has just under 300 employees.
To see Globalive's new ownership structure, click here
Globalive lawyer Hank Intven also noted the CRTC has accepted that a minority shareholder may have influence over a company, but there has to be evidence it dominates a carrier’s decision-making. There is no such evidence Orascom does that, he said.
There was also a plea from Globalive’s chairman and majority Canadian shareholder Anthony Lacavera that the commission not order the company to dilute Orascom’s debt with more Canadian investors. Lacavera wants more investors, but if the CRTC imposes a deadline financiers would have an advantageous bargaining position.