John BitoveDeborah Baic/The Globe and Mail
There will be plenty of new competition in the Canadian cell phone business, even if Ottawa upholds a regulatory decision to keep Globalive Wireless Management Corp. out of the game, John Bitove says.
Mr. Bitove, whose company Data & Audio-Visual Enterprises Wireless Inc. is gearing up to launch a new service early in the new year, said in an interview that it would be a huge mistake for Industry Minister Tony Clement to overturn the federal regulator's ruling that Globalize is insufficiently Canadian to participate in the Canadian 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 of its debt is owned by an Egyptian company, Orascom Telecom Holding SAE.
Mr. Clement, whose government is keen to promote competition in the telecommunications business, is currently reviewing that decision after getting input from the provinces and industry players.
Mr. Bitove said that in a letter 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."
With his firm ready to start up in several big cities in Ontario, British Columbia and Alberta, Vidéotron Télécom Ltée likely to be operational next year in Quebec, and Bragg Communications Inc. planning new service in the east, 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 the Canadian ownership regulations, he said, because it would unfairly penalize those who have played by the 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 Communications Inc. and Bell Canada - would likely change their corporate structure in those circumstances, he added.
And those changes wouldn't just involve ownership, he said, because the current rules also govern management structure, international contracts, and board configuration.
Mr. Clement's spokesman Darren Cunningham said that the minister is "working through" the submissions he received from industry players by last Wednesday's deadline. He would not indicate when a decision is expected, although 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, and had hired and trained hundreds of employees. Currently, they are being kept on the payroll pending Ottawa's decision, and are being deployed to help out in community volunteer programs while they cool their heels.
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 of the spectrum would work, but he 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 current employees, if they end up out of work after the government's decision.
Mr. Bitove's wireless operation will start up early in 2010 in Toronto, Vancouver, Calgary, Edmonton and Ottawa, eventually spreading to suburban areas and smaller centres. Now widely known as DAVE (an acronym for the company's name), it will get a new "consumer-friendly" name early in the new year, he said.
Eventually it will employ as many as 1,000 people, he said.