Bell and Rogers are ready to pounce on Globalive’s spectrum

by Jeff Wiener on November 16, 2009

Bell Rogers pounceBell and Rogers have both made public declarations that they are interested in acquiring the Globalive spectrum if Globalive isn’t in a position to use that spectrum.

Wind Mobile’s cellular application was approved by Industry Canada in March. Their ownership structure was scrutinized at the time and deemed to be acceptable. Wind Mobile, in partnership with Egypt’s Orascom, were set to launch Canada’s next and fourth national carrier network until the CRTC got their regulatory claws into the deal. The CRTC took issue with Orascom’s foreign investment and on October 29th denied Globalive’s cellular application.

Now Globalive is obviously trying to come up with an alternate solution which would be acceptable to the CRTC. In the absense of a deal Bell and Rogers have both stated that they would be interested in the spectrum. Bell’s statement is as follows:

“if 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 paid by Globalive”

50% of the price paid by Globalive. That’s it !! Globalive was ready to launch. Bell, Telus and Rogers file a complaint with the CRTC and request further investigation into Globalive’s investment structure. The application is denied and now Bell is ready to pay up to 50% of the price paid by Globalive.

And then last Thursday after a speech at the Toronto Board of Trade Rogers CEO Nadir Mohamed stated the following:
“Spectrum is a very valuable asset. It’s the real estate of our business, so Rogers would be for sure interested in picking it up. I’m sure others would be.”

We’re missing a few more public declarations – Telus will of course throw their hat into the ring, and then maybe (here’s hoping) Shaw and Videotron might also bid for the spectrum. Shaw had an agreement (collusion really) with Rogers not to compete in each other’s territories. Shaw agreed not to compete in Ontario & Quebec, and Rogers in the West. That agreement is now over, and Shaw is now entering the Ontario market with the acquisition of Mountain Cablevision of Hamilton. If the Globalive spectrum goes up for auction then I’m sure there will be some active bidding with the end price being probably higher then the original $442 Million paid by Globalive in the first place.

Actually, if their spectrum went back to auction the entire process would be a sham. Globalive paid, and Industry Canada accepted the money with full disclosure of the Globalive ownership structure. The Minister of Industry Tony Clement should come to Globalive’s rescue, and quick.

In the mean time, Public Mobile and Dave Wireless are getting ready to launch in the next couple / few months.

Written by: Jeff Wiener. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

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Feu vert pour Globalive et autres nouvelles. « Le Minarchiste
December 14, 2009 at 9:50 am

{ 2 comments… read them below or add one }

Joel November 16, 2009 at 10:12 am

Classic example of the “one hand doesn’t know what the other is doing” by the feds.

This is an utter embarrassment for the federal government. Industry Canada issues the spectrum based on the agreed ownership structure (in good faith), and the CRTC then turns around and takes that all away.

If the cabinet can’t do due diligence in the very very near future, then it’s true, this whole process is a sham.

And of course both Bell and Rogers want the spectrum space. Of course they do, why not. Even more reason to stifle competition. If there is another auction held, then the bug guys including Telus should be required to pay at least 3 times what Globalive paid. But then they will probably introduce another “fee” and chalk it up to “new and improved” network construction and maintenance, and make it look like a new government “tax.”

I hope Mr. Lacavera is able to sleep nights because this roller coaster ride may only be just beginning.

Stuart November 23, 2009 at 8:00 pm

This story has been beaten to death in the media, but there are so many reasons why it needs to continue. I believe Canada needs to crawl out of its’ anti-free-trade policies surrouding the wireless sector and allow competition. Globalive is the only potential for another national wireless carrier with the ammon to break up the oligopoly of Rogers, Bell, and Telus. I have posted a number of articles about this on my blog http://investingincanada.info and would love to hear your oppinion as well.

As for the Minister, he better accept brown envelopes full of cash like the CRTC boys did. It would be a real shame to have Globalive’s wireless contracts that were meant for new competition only be bought up by the only carriers capable of being the highest bidders-Roger, Bell, and Telus.

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