Globalive still wants to be cellphone player

Globalive is still planning to launch its new, national cellphone company and will continue to test its wireless network connections, its chairman Anthony Lacavera says.

MONTREAL — Globalive is still planning to launch its new, national cellphone company and will continue to test its wireless network connections, its chairman Anthony Lacavera says.

Lacavera said Monday the CRTC, which ruled last month his company isn’t Canadian operated and controlled and put its launch on hold, has given Globalive some hope with a recent decision.

The federal broadcast regulator has ruled that all wireless carriers must continue to co-operate in the testing of Globalive’s network with theirs as long as its proposed wireless carrier status hasn’t been revoked.

“It shows me that the incumbents aren’t going to be able to rule the day here any longer and that competition for Canadians in wireless is going to become a reality,” he said.

Lacavera said Globalive needs to make sure that its wireless network works with the major carriers’ networks to allow cellphone calls to take place between them. “The commission directs all carriers to co-operate with any company that has been granted such ’proposed status,”’ the CRTC said in a letter.

Rogers (TSX:RCI.B) and Bell (TSX:BCE) had argued that they shouldn’t have to co-operate because Globalive is currently ineligible to operate as a Canadian company, the CRTC said.

Telus (TSX:T) said it continues to co-operate, but argued CRTC should revoke Globalive’s status as a proposed wireless carrier if it doesn’t meet Canadian ownership and control requirements within 60 to 90 days, the letter said.

Lacavera said wireless players, both established and new ones, interested in buying the spectrum that Globalive has purchased for $442 million should forget about it.

“I don’t intend to give up now.”

Lacavera wouldn’t comment on any new financial partners or arrangements that could help Globalive comply with the recent CRTC ruling.

“We’re assessing all of our alternatives with respect to that.”

There have been reports that Rogers and new player DAVE Wireless are interested in Globalive’s wireless spectrum if it becomes available.

John Bitove, DAVE Wireless founder, said the two companies have spectrum in the same parts of Ontario and in the populous areas of British Columbia and Alberta.

“In almost half of the country’s population, we have overlapping spectrum,” Bitove said, adding such spectrum would be necessary as DAVE grows and has more customers and offers more services.

Bitove didn’t rule out the possibility of DAVE and Globalive forming some kind of partnership.

“That’s always an opportunity that’s there,” he said. DAVE plans to be up and running next year.

Industry Minister Tony Clement is reviewing the CRTC decision.

Industry Canada said Monday that it’s continuing its review of the CRTC’s ruling and is consulting with the provinces and territories on this issue. It has asked for comment on Globalive’s ownership by Wednesday.

Globalive wants to be Canada’s fourth major wireless carrier and compete with Rogers, Bell and Telus. It has spectrum across Canada, but not in Quebec.

The CRTC has said that Globalive currently doesn’t meet the Canadian ownership and control requirements to operate as a telecommunications carrier.

Egyptian telecom Orascom holds 65 per cent of parent company Globalive Holdings, while Lacavera owns the rest of the company.

Lacavera holds two-thirds of voting shares and Orascom has one-third, a structure accepted by Industry Canada when Globalive’s licence was granted in March.

However, much of Globalive’s debt financing, more than $500 million, a big sticking point for the CRTC that would need to be changed.

Globalive’s status as a proposed wireless carrier was granted by the CRTC a year ago.

Michael Hennessy, senior vice-president of regulatory and government affairs at Telus, said the matter may end up in the federal cabinet’s lap.

“It’s business as usual until the government sorts it out,” he said.

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