Telesat in the Market for Global Acquisitions

by Jordan Richardson on March 17, 2010

Stephen Harper’s calculated plan to remove foreign ownership rules from Canada’s telecommunications and broadcasting sectors is rolling into action and Telesat Holdings Inc. is chomping at the bit to make use of the new undisturbed circumstances.

Telesat Holdings Inc. is Canada’s largest satellite company and they are currently and seriously going over the idea of global acquisitions in light of the Conservative governments loosening of the foreign ownership restrictions in the telecom sector. It is true that Harper, to give the misapprehension of a vigilant policy, first agreed to loosen restrictions in the satellite sector and said he would approach the “larger” telecommunications sector later.

But it is also true that the satellite sector is, in point of fact, the actual groundwork of the telecom sector in Canada.

Telesat Holdings Inc. can’t help but be a little flighty about the prospect of heading out into the global markets with a sack full of cash and fewer rules to play by. And with only some people actually paying attention to who owns the satellites, it’s easy for Telesat to march out into the fray and do whatever they want.

Of course, Telesat Holdings Inc. was created by the government in the 1970s. It was an incredible accomplishment for Canada and it helped put Canada’s telecommunications on the map, so to speak. But once Brian Mulroney took office, Telesat was privatized and Bell Canada took over. Eventually, Bell spit out Telesat as its own standalone corporation. Interestingly, BCE’s Bell Canada unit is still Telesat’s biggest customer. Small world, eh?

With these new regulations, Telesat Holdings Inc. is telling anyone who will listen that it is back in the game and is in the market for global acquisitions. Along with this, they are telling anyone who will listen that the old rules were crippling to Canada’s telecommunications markets as a whole and the foreign ownership rule relaxation is the only “real” way to draw in valid competition to Canada’s markets.

To say that Telesat Holdings Inc. was suffering prior to this revelation from Harper would be a bit of a jump, of course, as the company’s press release concerning 2009’s fiscal performance presents a pretty luminous picture – even as their other press release considers their prior pre-deregulatory predicament as “substantially disadvantaged.”

In any event, it’s not unexpected that the fourth largest satellite company in the world would be frothing over these relaxed regulations. They will now have the chance to head out into the Great Wide Open and seek out those beneficial acquisitions that they’ve thirsted after for so long.

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