Naguib Sawiris is a good friend to have. In 2008, after a dinner meeting in Cairo, the Egyptian telecom titan decided to plunge roughly $700 million into Globalive, Anthony Lacavera's challenger to the Big Three Canadian wireless players. Globalive finally launched its Wind Mobile service this past December, after two years of holdups and grovelling before the Canadian Radio-television and Telecommunications Commission. So far, it has signed up 100,000 customers, and Sawiris is about to invest hundreds of millions of dollars more to keep it going. Why? For one thing, he likes Lacavera. But Sawiris is also determined to get some payback. Since taking over the telecom division of his father Onsi's sprawling Orascom empire (which started out in construction and now includes hospitality and IT), Sawiris has signed up 120 million subscribers in Africa, South Asia, Europe, the Middle East and North Korea. And to hear him tell it, not even the Supreme Leader himself caused as much hassle for Orascom Telecom as did the CRTC. As for Bell, Rogers and Telus, they might have messed with the wrong guy. Here's what Sawiris has to say-with a few notes of our own.
How did you meet Tony Lacavera?
We go where people don't dare to go. You have to ask yourself why there isn't a Vodafone or a Telefónica or a Deutsche Telekom or an Orange in Canada. It's the only country in the world that doesn't have any foreign operators. But we don't mind the bureaucracy or the risks involved, so that's how we got to know each other. Tony was nice enough to come to Cairo and have this famous dinner in a Chinese restaurant at the Four Seasons Hotel. And we liked each other. I've turned down a lot of deals in my life because I didn't like the party on the other side. It's the luxury of being rich-you are not forced to do business with anybody you don't like.
You invested in Wind Mobile without much control. Can you elaborate on what the process was like?
We bet that this was an unsustainable situation, built on the fact that Canada cannot be the only country in the world besides China that prohibits foreign direct investment in the telecommunications sector. So we said, "Okay, we'll accept the conditions as they are now, and one day for sure, things will change." We believe that the damage Canada is incurring because of the lack of competition-and I'm not talking just about the consumers, but applications, technology, ease of use-is counterproductive. It doesn't push people to excellence because they have the consumer by the balls. If you compare Canada and the United States, there's a big gap. One day, Canada has to go out and become a global fighter. How can they fight when they haven't been exposed to global players? To give you an example, how many RIMs do you have?
Well, I think Bombardier is another. I fly Global Express, and I think it's the best plane. It was the best airplane, until two years ago, when the new Gulfstream G650 was unveiled. Bombardier doesn't have a plane equal to this plane, and it will take them 10 years to get one. So it shows you how if you interact globally and so on, you're always ahead.
When you started looking at Canada's telecom market, what did you think of the domestic players?
It was a joke. First of all, the penetration rate was stuck. Penetration rates in all European countries and the U.S. are at 100%, 120%. And it was at 60% here when we started. Fact number two, the ARPU-the average revenue per user-is, with all three players, the same. It was very clear that there was an opportunity there. Of course, we didn't estimate the difficulties-the obstacles, rather-that were put in our way: all the CRTC processes and delays. It was something we did not expect to see in a modern country that is part of the WTO and is supposed to be encouraging investment. It was a big shock. And it has cost us dearly. If it was not for the Minister of Industry, who did the right thing in the end, we would have been in deep shit.