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What’s the impact if Globalive doesn’t launch?
We want Globalive to launch their Wind Mobile brand. We are also excited to see the other new entrants Dave Wireless and Public Mobile enter the market. All these new options ultimately brings us Canadians more choice and will hopefully lower our rates.
All day today Globalive, TELUS, Rogers and Bell are behind closed doors doing in-camera questions and closing arguments. I’ve been listening to the audio hearing from yesterday’s CRTC hearings into Globalive’s foreign ownership and although there are many notable quotes, there are a few that stick out in my mind… all based around the implications if Globalive did not launch.
At 14:25 in the TELUS video:
Len Katz, Vice-Chairman of Telecommunications for the CRTC asks the TELUS representatives “If Globalive were to launch, has TELUS figured out its impact on what it would be on TELUS? And how big would that be?”
TELUS responds: “No, I mean, they will be a competitor, they obviously have some of these things they are talking about, um,, and we’ll compete with them”.
Katz: “Let me put it this way, Will TELUS make more money or less money if Globalive launched?”.
TELUS: “I don’t know. It’s another competitor, it depends on how they launch”.
Katz also asked the same question to Rogers reps… “What would be the impact on Rogers if Globalive entering the market, figure between 5 and 7 million subscribers I think was mentioned in conversations this morning. What would be the impact on Rogers?”.
Rogers Reps: “Well, um, I mean I’m sure Globalive will do a credible job. We face competition everyday. We’re going to face it with or without Globalive and I think the market will be very competitive with them and very competitive without them.”
Katz: “So you’re saying it doesn’t have any impact on you?”
Rogers Reps: No, I mean, I wouldn’t say no impact. Obviously every competitor are ones we take seriously. But, it doesn’t look to us that they are going to be anywhere near the force that say Videotron is going to be in the marketplace.”
Katz: “So what do you want us to do? There’s the jobs, we are talking about Canadian control, Canadian interests. There’s about 300 Canadians, 230, 240 somewhere between that where Globalive has employees. And they have quite a bit of stake in this. What are you looking for? This company to restructure to meet the rules? Looking to send the proposal to be shelved, killed? Other than the people in this room there are a lot of people who have something at stake here.”
Rogers Reps: I think you have to reduce their role as a combined debt and equity holder because it’s, there economic interest is too overwhelmingly huge. You have to make the veto’s a little more reasonable.. and then those 5 other items that I identified that are just not consistent with Canadian ownership and control.”
A 10:52 of the Bell statements “Mr. Chairman, you asked TELUS and Rogers when they appeared, What would they do in your shoes. The answer lies in Industry Canada’s own AWS policy framework. Industry Canada contemplated this possibility and provided the way forward. The spectrum is to be forfeited and returned to industry Canada… Industry Canada will then re-auction the returned spectrum…. Bell Canada is prepared buy up to 50% of it for up to 50% of the price payed by Globalive”.
Industry Canada already gave the green light for Globalive to launch and made it clear with their intentions at the start of the Wireless Spectrum auction: “Our government’s intentions are clear: to achieve lower prices, better service and more choice for consumers and business. We believe in relying on market forces to the maximum extent feasible because competition benefits consumers, and consumers benefit most when markets are as competitive as they can be.”
So what are your thoughts?
There has certainly been an incredible amount of excitement for their WIND Mobile brand. Lots of jobs have been created, contracts have been signed and people are ready to sign up. As wireless consumers do you believe Globalive should/will launch their network?
Discussion
20 comments for “What’s the impact if Globalive doesn’t launch?”
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Wow why does Bell want that Spectrum. Its interesting. I am hoping if it re-sells T-Mobile Canada will emerge. I hope Wind launches seems like the Big 3 don’t care about Wind because they don’t expect them to launch at all.
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Bell needs to pull thier heads out of thier butts. the only reason theyre even there is because they KNOW if we get just ONE more decent carrier in canada theyre gonna LOSE most of thier buisness. with thier no-show service technicians and thier less than whats advertized internet service, the SHOULD have to either put up or shut up.. if a big company like bell are afraid of competition to this extent.. what does that tell you abotu thier faith in themselves? they know thier done for…..
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I found it so interesting that Bell is willing to buy 50% of spectrum owned by globalive for 50% paid price. I bet they would love to have that option. It shows exactly what their intention was when Telus started the whole story…
Get the spectrum that was reserved to help competition. give it to bell and they will make sure that we get cheaper service!!??!!?. if this kind of things happens I for one will loose faith in our Gov. for ever…..
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Kinda stupid eh! lol
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They don’t want the spectrum (in spite of what they said).
What they want is to prevent WIND from launching. They want to keep things as they are.
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How disappointing.
This company is going to hire locally and spend money on infrastructure locally.
I’d rather have competition than worry about who owns these new cellular entrants.
Shame on the CRTC for entertaining attacks by Telus, Bell, and Rogers.
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No, Globalive cannot launch as is.
Lasavera is a maverick. He hopes to pull wool over everyone’s eye. Sawiris sees Lasavera as a perfect Canadian shell and with nothing to lose to buy into the spectrum. It is a guarantee profitable investment. That is why Sawiris said he had to put in the money. He had a choice not to but the profit is too great.
Now, if the spectrum can be forfeited, then it is a different story for Sawiris.
To truly increase competition, is to eliminate CRTC and the Telecom Act. These two factors create a regulated environment that is not conducive to competition.
May be Ontario Teachers Pension might invest. Would Sawiris willing to be a minority shareholder? He said he doesn’t want that.
As the law stands, can’t see how Globalive can pass. The law is the question here. Everything else is distraction and noise and need not to enter into the picture, whining included. Any whining should be directed to Lasavera for his risk taking behaviour.
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I also agree with bearvertail that they cannot launch as it is. CRTC can ask them to make changes to the financing and make real canadian controlled. I really do not see the possibility of their spectrum being forfeited.(Although Bell can have that wish in their dreams) That would not give a good signal to the investing community within Canada and abroad. I feel they would be given a time frame to make some changes and then possibly another review and then they can launch. I can see a 3-6 months of delay for their launch but I am confident that in 2010 it would be launching. SS
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SS,
The forfeiture is the Industry Canada spectrum auction rule. Bidder is supposed to be eligible for operating license before they bid. Lasavera/Sawiris did not have the structure. They bid for the spectrum anyway, probably hoping the regulator and government willing to look the other way for the sake of competition.
Well, the gamble is not turning out.
I am curious in the event of forfeiture of spectrum. Is the full amount refund to Sawiris? Has the money even changed hand anyway?
In the hearing Bell mentioned that Industry Canada can then re-auction the spectrum to new players. In the event that nobody wants it, BCE will pay 50% of the price paid by Sawiris for 50% of the spectrum. BCE in effect also set the floor price for the new buyer so new company not going to get in the game for cheap. Smart BCE.
Doesn’t matter how you slice it. Lasvera needs to find Canadian investors to replace the Sawiris’s debt. However, Sawiris said in the hearing that he doesn’t want to be a minority owner. Sawiris effectively put an ultimatum to CRTC, approve it or he will walk.
In summary, forfeiture is another rule. It should have no bad reflection to investing community. It only reflects bad on Lasavera.
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Beavertail2 – To me forfeiture looks to be a very extreme step. Always the new player would be given a chance then only they would think of forfeiture if Globalive still does not comply even after the time has elapsed. There are around 300 jobs at stake in a bad/improving economy. Industry canada has already approved their structure so for me forfeiture is really not looking an option at this moment. I have a wishful feeling that Globalive would survive.SS
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Whoever said Globalive was going to spend their money locally is completely clueless. They will hire a few call rep and a few engineer, but this is at a very limited level. Just make your research and look for “Orascom” in Google. Their mother company owns multiple wireless network around the world. They are hosting all their intrastructure in Egypt, they most likely have a call center in India. I’ve met with them an out of the 20 people I met with, only one was canadian! Everybody else were from Egypt…. Haven’t you noticed that Rogers/Bell/Telus are not saying anything about the other new carriers?!?!? Hello planet earth… oh and btw, you don’t want to know where the money is coming from… and no, it’s not oil.
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Some pretty impressive rumour-mongering! Do you have some soources to back that up?
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The fact of the matter is that the CRTC has the best interests of BIG Canadian businesses and doesn’t give a damn about the citizens that support them. We’ll see it when the CRTC rules that Globalive cannot launch. There have been multiple examples over the past the showcase how CRTC is a complete waste as far as the average citizen is concerned.
Here’s a scenario to think about. Globalive launches and goes the route of overseas call centers (hmm Bell). In the mean time everyone’s prices drop because of some much needed competition in the market place. People get sick of having to deal with customer service reps that can’t speak english and leave globalive. I’m failing to see the negatives. Oh did I mean cell phone penetration would rise drastically if services became more affordable?
http://dissolvethecrtc.ca/node/1
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Who cares that the owners are not Canadian. This foreign ownership rule makes no sense. The best prepaid price in Canada is 20 cents per minute. In places like Singapore and Thailand it’s 5 cents a minute. Do I need to say more?
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here’s a response:
Bell: you can go to hell!
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http://think-forward.ca/2009/09/the-canwestglobalive-ownership-dilemma/
I found this blog interesting. ss
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SS said:
“Haven’t you noticed that Rogers/Bell/Telus are not saying anything about the other new carriers?!?!? Hello planet earth”
http://www.theglobeandmail.com/report-on-business/probe-new-rivals-ownership-rogers-urges/article1283344/
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Dealt with Globalive on a marketing arrangement. They were unscrupulous , predatory and dishonest to say the least. Canada does not need a company like this on the scene.
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Having lived overseas I realize how badly Canadians are being raped by local mobile phone companies. We need new providers with new outlooks. We should not be paying for any incoming calls -EVER. The article below sums it up
http://www.cbc.ca/technology/story/2009/08/11/canada-cellphone-rates-expensive-oecd.html
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…and the truth is, our results are probably even worse than the study indicates.
Most of these surveys and comparisons take only the listed plan rate, and don’t take into account the mandatory fees most all of us have to add on; $7-$9 SAF, 911 fee etc, etc., not to mention paying $7 for caller ID, $8 for voice mail and so on; things most other countries include for free.
A plan advertised at $25/month will cost easily close on $50/month in Canada by the time you add on these fees, whereas a plan elsewhere listed at $25 is actually $25.
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