News

Wireless rivals are stepping up their attack on Globalive, with an unlikely alliance of western Canadian telecom players targeting the Toronto-based company’s reliance on an Egyptian backer.

Telus and Shaw Communications, normally fierce competitors, teamed up to run an open letter to Industry Minister Tony Clement on Monday, urging the politicans to back a regulatory decision that derailed Globalive. Last month, the Canadian Radio-television and Telecommunications Commission, or CRTC, ruled Globalive’s reliance on loans from Cairo-based Orascom voilated domestic ownership rules.

Telus and Shaw applauded the CRTC decision and urged Industry Canada to back the regulator in an advertisement Monday in the Hill Times. The campaign drew notice from CARTT, a much-watched telecom and cable industry website, which noted that in addition to the two big dogs of telecom in the west, the Hill Times ad was also backed by the Canadian Film and Television Producers Association “which often doesn’t see eye-to-eye with carriers” and wireless upstart Public Mobile.

Industry Canada set a deadline of Wednesday for public submissions on the CRTC’s Globalive decision.

“Under the law, the CRTC had no choice but to find Globalive non-compliant. The evidence as presented in an open hearing is irrefutable. Globalive’s majority owner, Egyptian carrier Orascom, controls 82% of Globalive’s capital structure. That is way offside of the law,” reads the letter.

“For the CRTC to have interpreted the law in any other fashion would have rendered meaningless Canada’s foreign ownership laws, not just as they apply in this case, but as they apply to all Canadian wireless, telecommunications, cable and broadcast companies currently operating in our country,” said the advertisement.

Eastern Canadian wireless players Rogers Communications and DAVE Wireless have both said they would be willing to purchase Globealive’s wireless spectrum if the company is unable to move forward.

Toronto-based Globalive paid $442-million for airwave licenses from Ottawa last year.

Right now, voting control of Globalive rests with Canadian chairman Anthony Lacavera. Orascom is a minority shareholder with 32 per cent of the votes. However, Orascom is lending Globalive more than $500-million, owns 65 per cent of its shareholder equity and has a $100-million services contract. The Egyptian company has stakes in telecom plays around the world, and claims 80 million subscribers. Globalive is already a player in Canadian telecom, with its Yak Communications unit offering cut-rate long distance and Internet services.