OTTAWA – According to Telus, wireless newcomer Globalive should be declared ineligible to operate as a telecommunications common carrier in Canada, as it is controlled by persons who are not Canadians.
The BC-based telecom giant made that assertion again this week as it filed comments for the CRTC’s upcoming review into Globalive’s ownership structure.
Globalive is co-owned by Orascom, a global wireless player based in Egypt with over 79 million wireless subscribers. Orascom holds a 65% indirect equity ownership, but less than 50% of voting control in Globealive Holdings, the parent company of Globalive Wireless.
But Telus alleges that Orascom’s ownership and level of control of Globealive exceeds what is allowed in the Telecommunications Act. Its submission calls the relationship between Globalive and Orascom “complex and multifaceted”, and it questions whether Orascom’s influence over Globealive’s affairs would compromise “the ability of management to act with the degree of independence which is the object of the Canadian ownership and control regime.”
“Orascom not only owns, directly and indirectly, 65.06% of the equity of Globalive, it has also contributed 99.92% of Globalive’s known debt”, Telus’ comments read. “Assuming a debt:equity ratio of 50:50, Orascom owns a massive 82% of Globalive’s capital.”
Noting that Globalive has adopted an Orascom-owned brand – called Wind – as its Canadian mobile brand, and that Orascom is entitled to appoint three of the seven directors of the holding company that owns Globalive, Telus also voiced its concerns over the level of control that Orascom would have over the new wireless company.
“Orascom, alone among shareholders, has a veto over a range of key financial and operational decisions relating to the business”, Telus’ submission continues. “For example, Globalive is bound to operate within the bounds of a business plan agreed by Orascom and other shareholders from which Globalive cannot substantially deviate without Orascom’s consent. Orascom even has (the) right to require other shareholders in the Globalive venture to sell their shares at a time and at a price and to a person of Orascom’s own choosing. As a condition of Orascom’s investment in Globalive, the responsibility for Globalive’s network architecture and design, and for vendor selection, has been outsourced to Orascom.”
The Type 4 public hearing is scheduled to begin on September 23, 2009, and the Commission said that it expects to issue a public decision within 30 days after the date of the hearing.
– Lesley Hunter
