Public Mobile CEO Alek KrstajicPeter Power/The Globe and Mail
Public Mobile Inc. , one of several new wireless companies that will launch cellphone service this year, has had its ownership structure conditionally approved by the CRTC, the regulator said Thursday in a release.
The low-cost wireless carrier, which has already opened several stores in Toronto and Montreal, paid just over $52-million for wireless spectrum at a government auction in 2008. The Canadian Radio-television and Telecommunications Commission said in a release that, pending minor changes, Public Mobile can proceed with it's planned launch in mid May.
Public Mobile, which said it is currently reviewing the CRTC's decision, has received significant financial backing from U.S. investors, such as Columbia Capital and M/C Venture Partners, but also received backing from OMERS, the Ontario Municipal Employees Retirement Systems.
The company's financial and ownership structure was, like many other new entrants, never considered controversial. CRTC approval was expected.
However, ownership and foreign financing issues have been in the limelight ever since Globalive Wireless Management Corp., which now operates Wind Mobile, was rejected by the regulator in October because of the $700-million Globalive received from Egyptian wireless giant Orascom Telecom Holding SAE.
Although the federal cabinet overturned the CRTC's ruling in December, allowing Wind Mobile to launch, big Canadian carriers such as Telus Corp. have continued to maintain that Globalive's ownership structure violates Canada's strict and complicated ownership requirements. Public Mobile still has a judicial review pending at the Federal Court that challenges the government's decision, seeking legal clarity on the ownership issue.
At Parliamentary hearings over the past two weeks into how foreign ownership should be dealt with in a post-Globalive decision Canada, CRTC chairman Konrad von Finckenstein told MPs that legislation should be simplified: No foreign entity should be able to directly or indirectly own more than 49 per cent of a Canadian communications company's voting shares, he said.
Most companies, including Public Mobile and Globalive and large carriers such as Rogers Communications Inc. and BCE Inc., agreed with liberalizing ownership restrictions. Larger carriers, however, maintained that ownership restrictions should be loosened for all players - not just the new entrants, as has been recommended by past blue ribbon panels that have reported to Parliament on the issue.