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Keep Globalive out of wireless game, rival says

John Bitove

Deborah Baic/The Globe and Mail

There will be plenty of new competition in the Canadian cellphone business, even if Ottawa upholds a regulatory decision to keep Globalive Wireless Management Corp. out of the game, John Bitove says.

Mr. Bitove, whose Data & Audio-Visual Enterprises Wireless Inc. is gearing up to launch its own new service early in 2010, said in an interview that it would be a mistake for Industry Minister Tony Clement to overturn the CRTC's ruling that Globalive is insufficiently Canadian to participate in the mobile market.

In late October, the Canadian Radio-television and Telecommunications Commission said Globalive cannot begin selling its services because it violates Canadian ownership rules. Specifically, the majority of its equity and almost all debt is owned by an Egyptian company.

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Mr. Clement, whose government is keen to promote competition in the telecom business, is currently reviewing the CRTC decision after getting input from the provinces and industry players.

Mr. Bitove said that in a submission to the minister he made the point that "they don't need to change the rules after the fact to try to address competition in Canadian wireless."

His firm, known as DAVE, is ready to start up in several big cities in Ontario, British Columbia and Alberta, Vidéotron is likely to start selling mobile services next year in Quebec, Bragg Communications Inc. is planning new service in Eastern Canada, and Shaw Communications Inc. may eventually enter the field. There will be lots of competition for the current players, even without Globalive, Mr. Bitove said.

It would wreak havoc on the industry if Globalive is allowed to operate without meeting Canadian ownership regulations, he said, because it would penalize those who have played by the existing rules.

"If you change the rules for anyone now, you will force the rest of us in the near term to consider aggressive changes to our structures," Mr. Bitove said. Even the current "big three" wireless companies - Telus Corp., Rogers Wireless Communications Inc. and Bell Mobility Inc. - would likely change their corporate structure in those circumstances, he added.

And those changes wouldn't just involve ownership, he said, because current rules also govern management structure, international contracts and board configuration.

If the government is going to change foreign ownership rules, they must do so on a thoughtful basis and take the time to conduct the debate, Mr. Bitove said.

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Mr. Clement's spokesman Darren Cunningham said Monday that the minister is "working through" the submissions received by the Nov. 18 deadline. He would not indicate when a decision is expected, though he said Mr. Clement is aware that Globalive is in limbo with a service ready to role out.

Globalive was gearing up for a November launch of its Wind Wireless service, hiring and training hundreds of workers. They are being kept on the payroll pending Ottawa's decision, and are currently being deployed to help out in community volunteer programs.

Globalive chairman Anthony Lacavera declined to comment yesterday.

Mr. Bitove said he, and others, would be interested in buying up "parts or all" of the wireless spectrum Globalive picked up in last year's federal government auction, if it becomes available. He's not sure how a resale would work, but said he could not realistically expect to get any of Globalive's $442-million worth of spectrum at a discount.

He is also willing to hire some of Globalive's employees, if they end up out of work after Ottawa's decision.

Mr. Bitove's wireless operation will start up early next year in Toronto, Vancouver, Calgary, Edmonton and Ottawa. DAVE (an acronym for the company's name), will get a new "consumer-friendly" name in the new year, he said.

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The company will target users who want to pay less for cellphone service, likely gleaning two-thirds of its customers from existing Bell, Telus and Rogers clientele, Mr. Bitove said. The rest will come from the 38 per cent of Canadians who don't currently have cellphone service.

The company will eventually employ as many as 1,000 people, he said.

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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