Globalive wins court battle over foreign control

Ottawa — Reuters

The WIND mobile store at the Holt Renfrew centre in Toronto is seen on December 15, 2010. (JENNIFER ROBERTS/JENNIFER ROBERTS for The Globe and Mail)

A long-running Canadian legal battle ended on Thursday when the Supreme Court declined to hear a challenge to a government decision to allow Globalive to offer wireless services in Canada despite its close ties to a foreign company.

The decision was a setback for Public Mobile, a Globalive rival that also offers a low-cost wireless service, and Canada’s telecoms regulator, the Canadian Radio-television and Telecommunications Commission.

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They had contended Globalive was under the control of Egypt’s Orascom Telecom Holding SAE, making the upstart provider ineligible to operate in Canada, which currently limits foreign ownership and control of telecoms firms.

Orascom has since sold most of its assets, including its interest in Globalive, to Russia’s Vimpelcom Ltd.

In a seesaw battle, the government overruled the telecoms regulator, the Federal Court overruled the government, and the Federal Court of Appeal overturned that decision, siding with Globalive and the government.

The case is close to being moot because of a government announcement on March 14 that it would soon allow non-Canadians to take control of telecoms carriers with a market share of 10 percent or less.

That would cover Globalive, which owns Wind Mobile, a newcomer to the wireless business.

Three carriers - Rogers Communications Inc., BCE Inc. and Telus Corp. - now dominate the Canadian wireless industry.

The government is eager to encourage competition in Canada’s wireless industry, which boasts some of the world’s highest rates. It set aside airwaves for new entrants in the 2008 auction that brought in Globalive’s Wind Mobile, Public Mobile and third upstart Mobilicity.

Vimpelcom does not directly own shares in Globalive, but has a third of the voting shares and two-thirds of the equity in a holding company that the courts consider Canadian.

The name of the case is Public Mobile v. Globalive Wireless Management Corp. et al. (F.C.)

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