Mobilicity Under CRTC Scanner for Ownership And Control Review

by Gaurav Kheterpal on March 10, 2010

CRTC probing Mobilicity Ownership

CRTC probing Mobilicity Ownership

CRTC is currently reviewing Mobilicity (formerly known as DAVE Wireless) to ascertain whether the new carrier conforms to Canadian Ownership and Control rules. During the Canadian Wireless Spectrum Auction, Moblicity had invested a whopping $243.1 million for 10 licenses. Moblicity is preparing to launch its wireless services in Toronto during the coming spring season and has been aggressively advertising its ‘No Contract, No Credit Check, Unlimited Wireless’ tag line.

Last week, CRTC sent a letter to Mobilicity informing the carrier that its ownership structure is complicated and therefore it will be reviewed for conformance to ownership and control rules. However, industry analysts believe that Mobilicity review may not be as lengthy and complicated as the Globalive (WIND Mobile) review. The letter states that Mobilicity would be undergoing a ‘Type 2’ review as compared to the rigorous ‘Type 4’ review conducted on Globalive (WIND Mobile) last year. Here’s an excerpt of the CRTC letter sent to Mobilicity.


“The Commission considers that, based on a preliminary review of the documentation filed to date (see summary of documents submitted by DAVE Wireless, appended to this letter), the ownership structure of DAVE Wireless appears to comply with the legal control requirements of the Act. With regard to control in fact, the Commission notesinter alia that on a fully diluted basis, 67% of the voting interest will be held by the largest Canadian investors and that the largest non-Canadian investor has provided less than 55% of the total capital of the company.

The Commission further notes that a significant debt facility has been provided through an export credit arrangement with a foreign bank for the purchase of telecommunications equipment. DAVE Wireless’ corporate governance provisions largely follow the guidelines laid out in the BCE and Globalive decisions.

At this time, and based on the information available, the Commission considers that the ownership structure of DAVE Wireless is of a sufficiently complex nature and that it holds precedential value for the industry and the general public. The Commission does not consider, however, that the evidentiary record would be improved by third-party submissions.

Accordingly, based on the framework set out in the Policy, the Commission hereby provides public notice that it will be proceeding with a Type 2 review of the ownership and control of DAVE Wireless in order to determine its eligibility to operate as a Canadian telecommunications common carrier.”

Mobilicity is owned and controlled by John Bitove and it is financed by ING ($25 Million), GMP Securities, L.P and National Bank Financial Inc. ($75 Million). While Bitove and company have some reasons to be worried till they get a clean chit from CRTC, I believe that they are safe from any major overhauling changes in their company structure (courtesty of a Type 2 Review) from CRTC. 

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

{ 1 comment }

Paul August 7, 2010 at 1:46 pm

I bought a phone and got a plan under false pretenses that I was to be provided service in a covered area. I am right in the middle of their supposed coverage area and I have to re connect to the network every 2 – 3 minutes. I brought my phone back for a replacement and the lady was outside trying to connect to the mobilicity network. This company is NOT ready to provide the service, they should NOT be selling phones to anyone!

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