Globalive complains that Telus breaks ownership rules

Wed Jun 20, 2012 7:51pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Globalive, an upstart entrant to Canada's wireless industry that fought court battles over its own level of foreign ownership, has filed a complaint to the regulator over the concentration of foreign funding at its much larger rival Telus Corp (T.TO: Quote).

Almost half of Telus' voting shareholders live outside Canada, which suggests they are not Canadian, Globalive said in a filing to the Canadian Radio-television and Telecommunications Commission (CRTC) on Wednesday.

In response, Telus said that the allegations are unfounded and misleading, and that it had comprehensive controls in place to ensure it does not run afoul of the law.

Canadian law currently bars foreigners from owning more than one third of the voting shares in any telecom company operating in the country, but pending legislation would loosen this restriction for small operators such as Globalive, while keeping it in place for Telus and other large operators.

Globalive, which operates under the Wind Mobile brand, is calling on the CRTC to open a public review of whether Telus is breaking the rules, in part so any decision would clarify what level of foreign involvement is allowed and how much responsibility a company has to act to remain compliant.

"The answers to these questions are very relevant to all actual and potential telecommunications and broadcast industry participants, and even the general public," Globalive's chief regulatory officer, Simon Lockie, wrote in the submission.

Globalive finally shook off years of legal uncertainty in April after Canada's Supreme Court declined to hear a challenge to a government decision allowing it to operate despite close ties to a foreign company, initially Egypt's Orascom Telecom Holding SAE ORTE.CA but now Russia's Vimpelcom Ltd VIP.N.

That court decision was rendered effectively moot by a March announcement that the government planned to loosen restrictions on foreign investment for small telecom firms.   Continued...