Globalive wins court battle, eyes more funding
By Randall Palmer and Alastair Sharp
OTTAWA/TORONTO (Reuters) - The end of a long legal battle over whether Globalive's foreign backing precluded it from offering wireless service in Canada opens the door for the company to amass more foreign cash ahead of an auction of airwaves next year, its chief executive said.
Canada's Supreme Court declined on Thursday to hear a challenge to a government decision to allow Globalive to operate in Canada despite close ties to a foreign company, initially Egypt's Orascom Telecom Holding SAE but now Russia's Vimpelcom Ltd.
The court's refusal to hear the case removed a hurdle that had kept other foreign investors from taking a stake in Globalive, CEO Anthony Lacavera told Reuters. He said he would dilute his controlling stake to welcome new investors but is not looking to sell the company.
"It gives me a very solid foundation to go out and raise additional financing to expand our network and I certainly think there are parties interested in acquiring the firm as well...but it's not my intention to sell," he said.
The court decision was a setback for Public Mobile, a Globalive rival that also offers a low-cost wireless service, and for Canada's telecoms regulator, the Canadian Radio-television and Telecommunications Commission.
Public Mobile said it was disappointed by the court decision, but it said that its legal challenge had helped push the government to remove foreign ownership restrictions for smaller operators such as itself and Globalive in legislation expected to pass by June.
"These legislative changes will restore a level playing field for access to capital," Public Mobile's general counsel Bob Boron said.
The government announced on March 14 that it would soon allow non-Canadians to take control of telecoms carriers with a market share of 10 percent or less, which covers all but Canada's three largest wireless operators. Continued...