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Report On Business Industry Minister urges foreign telcos to invest in Canada’s wireless sector

“We need it. The wireless sector, you need a lot of cash in terms of investment,” Christian Paradis said Tuesday in an interview following a speech to foreign investors at the Mobile World Congress in Barcelona.

Adrian Wyld/THE CANADIAN PRESS

Canada's Industry Minister is abroad urging foreign telecom companies to invest more in this country's wireless sector as a means of keeping competition alive here.

Canada's smallest wireless firms still find themselves strapped for capital despite Ottawa's move last year to ease foreign investment limits on ownership of small players in the mobile market.

"We need it. The wireless sector, you need a lot of cash in terms of investment," Christian Paradis said Tuesday in an interview following a speech to foreign investors at the Mobile World Congress in Barcelona.

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"Let's hope by the end of this event we can entice some of those international players to become Canadian players as well," the minister told the audience during his address in Spain.

The future of competition in Canada's wireless market is uncertain as small players struggle to find new capital. Industry speculation for some time has focused on the future of Wind Mobile Canada. Observers are waiting to see if it ends up being merged with a rival or swallowed up by a large incumbent. A takeover would reduce competition in some regions of Canada.

Asked if he was concerned about the state of competition in the wireless industry, the industry minister acknowledged the "challenge of consolidation … in this sector" as smaller firms find themselves pressed for cash to fund investment-intensive upgrades.

He said he wants to see four wireless players in all regions of Canada including rural areas. Right now wireless customers in small-town Canada don't always have four options for service.

Mr. Paradis said he hopes that Canada's decision to relax foreign ownership restrictions governing small wireless players, combined with a new auction of valuable wireless spectrum and clearer rules for tower-sharing and roaming can "help these players find investors."

Separately, the Industry Minister said the next auction of wireless frequencies – the powerful 700 MHz spectrum, would take place "by the end of 2013." That's a delay of Ottawa's 2012 promise that this auction would occur in the first half of 2013.

Mr. Paradis said Ottawa would soon release the rules for the 700 MHz auction – but he did not elaborate on timing. The federal government has been saying for some time that these rules would be released shortly. Industry speculation is they may be tabled as part of the 2013 federal budget.

In its first major effort to loosen restrictions on foreign investment, the Harper government last year threw a lifeline to struggling newcomers in the wireless industry – allowing them to tap deeper pockets of non-Canadian capital.

The Conservatives passed a law allowing non-Canadians to buy up to 100 per cent of domestic wireless firms that have a market share of 10 per cent or less.

The hoped-for injection of foreign cash for smaller players has yet to materialize.

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