Ottawa to appeal over Globalive court ruling (Canada)
The Canadian government is all set to appeal over a court ruling that had declared that the launch of the Globalive (Wind Mobile) network was illegal.
At the time when Globalive was set up, it had the support from Egypt’s Naguib Sawiris, but Canadian law limits the foreign shareholders to minority interests. Following complaints, the telecoms regulator investigated about the company and found out that while the shareholding was within Canadian limits, the financial and technical backing offered by Sawiris’ Orascom Telecom had pushed its effective interest above the level allowed by the law.
However, the government later overturned that decision and decided to allow the company to launch its services regardless, in a move which was seen as potentially heralding a revamp of the country’s restrictions on foreign investment.
A couple of weeks ago though, a federal court struck down that decision and the company faces a theoretical threat of being shut-down. The Court ruled that the Cabinet order contained two errors and hence that the order should be quashed. This decision does not go into effect for 45 days.
According to Canada’s Industry Minister, Tony Clement, said today that he would like to confirm that the Harper Government will be appealing the Court’s ruling. They believe that their decision was the right one for Canadian consumers and they will vigorously defend it. Globalive is a Canadian company and meets the Canadian ownership and control requirements under the Telecommunications Act. Globalive should, therefore, be able to continue to offer service in the wireless telecommunications market.
According to Anthony Lacavera, Chairman of WIND Mobile, they are pleased that the Government has decided to appeal the Federal Court’s decision. From the beginning, Industry Canada and then Cabinet, maintained, with a full knowledge and understanding of the facts of their structure, that they are fully compliant with the Telecom Act rules, and they are pleased that the Government is vigorously defending its decision.
Canada govt allows Wind telecom to start operations; overturns regulator’s decision
www.WirelessFederation.com/news: Communications regulator CRTC’s decision has been overturned by the Canadian Government which has allowed Ezyptian based mobile newcomer Globalive Wireless Management, backed by Orascom
telecom, to launch its services in Canada.
Globalive, which operates under the name Wind Mobile, acquired spectrum rights for CDN 442 million in August 2008. At present, the company has built most of its network and would launch service in Toronto and Calgary this month.
CRTC announced in October that the company was operating against telecom law requiring a minimum level of Canadian ownership. Orascom owns slightly more than 65 percent of the equity in Globalive and nearly all of its debt, which the regulator felt gave the foreign investors too much control over the company’s daily operations.
While overturning the CRTC’s decision, Industry Canada, the government ministry said that 80 percent of Globalive’s voting shares are held by Canadians. Besides, the company is based in Toronto and should be considered Canadian and allowed to start services in order to stimulate competition on the mobile market.
The decision has been welcomed by Wind but rival mobile operator Telus which said that this will give an “unique advantage†to Wind, after other companies were told they could not bid with foreign investors in the spectrum auction.
BCE scraps income trust plan, ploughs ahead with restructuring
Canada’s largest telecoms group BCE has cancelled a plan to convert itself into an income trust, six weeks after the Canadian government announced it would change the way it taxed income trusts from next year. The move mirrors a similar u-turn by rival telco TELUS Corp late last month. BCE, the parent company of Bell Canada, announced that it still intends to move ahead with the elimination of its existing holding structure. Under BCE’s restructuring plan, holders of Bell Canada preferred shares will be asked to exchange their shares for BCE preferred shares with the same series rights, whilst receiving a one-time special dividend of CAD0.2 per share. At its next annual shareholders meeting, the company will change its name to Bell Canada Inc and regroup its structure into two operating businesses: Bell and Bell Aliant Regional Communications. ‘This new business and financial model allows us to invest significantly in growth platforms and to share our progress with shareholders’, said chief executive Michael Sabia.
On 31 October, Canadian Finance Minister Jim Flaherty announced that the government would tax the cash distributions of new income trusts to try to level the playing field with firms that pay regular corporate income taxes.
