All foreign ownership restrictions on telecom companies should be lifted quickly to keep the mobile phone industry competitive and beneficial to consumers, says a new report.
The SeaBoard Group said Monday that companies from outside Canada could bring capital and know-how to the industry if the federal government allows foreign investment “without restriction.”
“It is our recommendation that the government allow foreign investment to enter the Canadian telecommunications industry unabated and without restriction,” the report said.
Industry Minister Tony Clement is considering what to do with foreign ownership restrictions in the telecom industry, recently opened up to more competition.
New wireless companies such as Wind Mobile, Mobilicity, Public Mobile and Quebecor's Videotron have all launched their services in the last year, competing with established players Rogers, Bell and Telus.
The report noted that with these new companies that consumers are beginning to see “relief” with more choice, improved service and better choices.
Foreign ownership of Canada's telecom companies is limited to 46.7 per cent through combined direct and indirect ownership.
“There may be dragons – indeed, the object of the exercise is to invoke the hot breath of competition – but these dragons would bring the magic of more competitive markets for the benefit of all Canadians,” the report said.
Wind Mobile's launch was delayed last year when the CRTC ruled it wasn't Canadian controlled. That decision was overturned later by Clement. Wind's major investor is Egyptian-based telecom Orascom.
The Montreal-based consulting group said Canada's investment cap is a significant barrier to foreign companies looking to set up shop in Canada.
However, SeaBoard said foreign investment “without restriction” should imply there are safeguards to allow the federal government to act if the “national interest” could be jeopardized.
The SeaBoard Group also said allowing the removal of ownership limits on wireless companies with a national market share of 10 per cent would allow them access to more capital and make them stronger competitors, also benefiting consumers.
