“Globalive Communications Corp., a two-year-old Canadian wireless carrier, is in talks to buy Mobilicity, adding a competitor to take on larger rivals BCE Inc. (BCE) and Rogers Communications Inc., according to a person familiar with the discussions.”
“Canadian telecom upstart Globalive wants to buy rival Mobilicity but no deal is imminent or indeed likely until the government clarifies rules on foreign ownership and airwave allocation, according to a source with knowledge of the situation.”
“Wireless newcomer Mobilicity is planning to launch an initial public offering early in the new year with the goal of raising up to $100-million.
Sources say the company plans to go public as early as the first quarter of 2012, provided that equity markets are less volatile. A number of IPOs have been ready to launch since late summer, but they were put on hold because markets were too choppy as the European debt crisis unfolded. [...] Read the rest of this entry »
* 0:00 I asked Tony for his take on the Banff session where he had a few “debates” with Michael Hennessy, Senior VP, Regulatory and Government Affairs, TELUS.
* 0:36 I asked Tony about the recent Federal Court of Appeal panel decision in favour of WIND Mobile. (see my tweets here with link to National Post article and here)
* 1:50 Have the other guys started the appeal process and asked the Supreme Court of Canada to review the case?
* 2:35 Did Tony bring up the topic of the court rulings with Chairman of the CRTC?
* 2:46 Is WIND feeling the pressure now that Moblicity is in Calgary?
* 3:18 What about the dead coverage zones in the C-Train tunnels near downtown Calgary? (Tony also talked about the coverage inside Toronto TTC.)
* 4:54 The revamping of the WIND customer service touchpoints.
***
For all other Banff 2011 related interviews, please see here.
Since 2009, I had the pleasure to chat with Tony Lacavera, Chairman & CEO, Globalive/WIND Mobile for a few times (see here and here). So it is my pleasure to chat with Tony again @Banff World Media Festival 2011.
It will take me some time to write the article plus process & upload the video after Banff. Stay tune.
As a WINDmobile customer, I’m surprised & angered to see Ottawa’s Globalive decision overturned by federal court. From CBC (with video interview of WIND Mobile CEO Ken Campbell),
“On Friday, Federal Court Justice Roger Hughes found Ottawa’s move was based on “errors of law” and ruled it null and void. He also ordered a 45-day stay in the ruling, meaning the company has time to appeal and continue to operate in the interim.
“We are very disappointed with this decision,” Globalive chairman Anthony Lacavera said. “We are examining our options but this is not over yet. We don’t intend to back down.”
Since its launch a little more than a year ago, Wind has already accumulated 250,000 customers, he noted.
Industry Minister Tony Clement said the government is studying the ruling and examining its options. “Our [government] stands with consumers who want more competition,” he said in a tweet.
Later, Clement commented on the decision in an interview to air Saturday on CBC Radio’s The House.
“I’ll be studying the decision and reviewing our options, but … our government still believes very strongly that we should be on the side of consumers, and what consumers want is more choice,” Clement told host Kathleen Petty.”
To me, here is one of the most telling quote in the Naguib Sawiris interview, “Worse than that, two of them offered to buy me out at a very significant profit. But that means I’m a broker, not an industrialist. I’m not the kind of guy who goes for the money—it’s about success. And this, I would consider it a bribe: We give you some more money, but go home and don’t make our life difficult. It would also be an admission of failure, which is not in my character.“
Iain Marlow From Friday’s Globe and Mail Published Friday, Oct. 29, 2010 2:02PM EDT Last updated Monday, Nov. 01, 2010 8:11AM EDT
Naguib Sawiris is a good friend to have. In 2008, after a dinner meeting in Cairo, the Egyptian telecom titan decided to plunge roughly $700 million into Globalive, Anthony Lacavera’s challenger to the Big Three Canadian wireless players. Globalive finally launched its Wind Mobile service this past December, after two years of holdups and grovelling before the Canadian Radio-television and Telecommunications Commission. So far, it has signed up 100,000 customers, and Sawiris is about to invest hundreds of millions of dollars more to keep it going. Why? For one thing, he likes Lacavera. But Sawiris is also determined to get some payback. Since taking over the telecom division of his father Onsi’s sprawling Orascom empire (which started out in construction and now includes hospitality and IT), Sawiris has signed up 120 million subscribers in Africa, South Asia, Europe, the Middle East and North Korea. And to hear him tell it, not even the Supreme Leader himself caused as much hassle for Orascom Telecom as did the CRTC. As for Bell, Rogers and Telus, they might have messed with the wrong guy. Here’s what Sawiris has to say—with a few notes of our own.
How did you meet Tony Lacavera?
We go where people don’t dare to go. You have to ask yourself why there isn’t a Vodafone or a Telefónica or a Deutsche Telekom or an Orange in Canada. It’s the only country in the world that doesn’t have any foreign operators. But we don’t mind the bureaucracy or the risks involved, so that’s how we got to know each other. Tony was nice enough to come to Cairo and have this famous dinner in a Chinese restaurant at the Four Seasons Hotel. Read the rest of this entry »
It was my pleasure finally to meet Tony Lacavera, chairman of Globalive & WIND Mobile, in person at the CRTC Breakfast at 2010 Banff World TV Festival after interviewing Tony over the phone in Sept 08 and Dec 09. I wanted to video interview Tony after the breakfast but he had a plane to catch so Tony promised to let me have another phone interview with him.
- How is WIND Mobile preparing for Sept 1st, 2011 when analog TV broadcast goes digital and those old analog TV frequency spectrum becomes available ? Any plans to bid for some new frequencies? (note: WIND currently doesn’t have coverage in Quebec.) Is WIND ready for new competitions from winners of the upcoming auction?
- Good to see WIND Mobile is keeping its promise and keeping an open blog taking users’ comments and feedback. Does WIND find it difficult to get useful insight from the comments and feedback which sometimes has lots of “noise”? I asked Tony to give some specific ideas or suggestions from users that WIND has implemented, unfortunately Tony wasn’t able to give me any examples.
- Tony mentioned that both him and Ken Campbell, WIND Mobile CEO are available to Canadians when the other wireless providers aren’t.
- WIND Mobile had lots of network problems a few weeks ago in my area (Calgary SW) and it seems to have improved in the last few weeks. While Tony was unable/unwilling to tell me how many network towers are in Calgary, he told me the total number of towers have doubled since launch.
- Is WIND Mobile able to get network or tower sharing access with incumbents? In an April 2010 speech, Tony mentioned that WIND had sent over 100 sharing requests to the incumbents and had no success. Unfortunately, this is still true! The incumbents are doing their best to NOT help WIND. :)
- The top WIND Mobile data user has been reportedly used 118 GB in one month. I suggested that using the rate of 5 cents per MB charged by the incumbents, 3 GB max data for the best $100/moth plan, the additional charges for the additional 115GB will be $5,888!!! Tony talked about the existing well publicized fair usage data policy with no cap, which I think is very fair.
- Tony also talked about how WIND see Public Mobile and Mobilicity as pure play wireless company. And since there aren’t much details on Shaw’s wireless plan, Tony didn’t have much to say yet.
- Finally, I asked Tony will WIND consider selling out to the big three in a few years down the road. And what kind of new promotions are coming up in coming months.
I appreciate very much Globalive chairman Tony Lacavera taking time today (a Sunday) to have an interview with me to talk about Globalive/WIND Mobile‘s plans after the government of Canada overturning the CRTC decision 2009-678 (PDF).
As a current Bell Mobility customer, I am excited to see a new wireless provider coming to the oligopolistic Canadian marketplace. The following are some highlights of my interview with Tony (mp3 download).
* WIND Mobile‘s plan to sign up new customers before Christmas and new year
WIND Mobile stores will open this week and Tony confirmed that WIND will roll out its wireless service as soon as possible and most likely before Christmas. I tried but was unable to get Tony to say the launch will be this week. Tony sees WIND has one chance to demonstrate to Canadians that it is a serious 4th national wireless provider competing with the likes of Bell, Telus, and Rogers. So he wants to launch when everything is ready. (Dec 15th update:BlackBerry Bold 9700. Dec 14th update: According to WIND’s latest press release, at 10:30am on Dec 16th, Tony and Ken Campbell, CEO of WIND will be unveiling the WIND Mobile store, and “the full line-up of products and services. The WIND network is currently live and fully operational with beta customers actively using the service and providing feedback.“)
WIND will have a few different phones available at launch and hope to expand on the choices available to include more offers. At launch, iPhones will not be available but will be available in the near future as WIND network can technically support the phones. As to the Google Phones, Tony also assured me the WIND network can support it when the phones are available. (Dec 14 Update: Some pricing & devices rumours from MobileSyrup, “Are these the Wind Mobile price plans?” and “The week the WIND came rushing in…“. We will know for sure on Dec 16th.)
* Last Friday on BNN, Tony said WIND Mobile has a target of 4-6 million subscribers in 5 years. I asked about their expected number of new customers vs customers that switch?
Tony explained that it will be difficult to estimate as different cities have different number of providers and level of competitions. For example, in Toronto, there are 7 brands/sub-brands operating and that is different from other smaller cities.
(Dec 14 update: BMO Nesbitt Burns telecom analyst Peter Rhamey estimates, “three dominant players – BCE (BCE-T), Telus (T-T) and Rogers Communcations (RCI-T) – stand to see a 5 to 10 per cent decline in subscriber additions next year … along with a price war, will erode earnings per share by 2.5 per cent at BCE and 5 per cent at Telus and Rogers“)
“These paragraphs signal the prioritization of enhanced competition in the marketplace. With support for foreign investment, the removal of foreign control limits may not be far behind.“
Tony reiterated the importance of the foreign control limits and Globalive is a Canadian company as he had said to other media outlets. You can listen to his answer in the audio interview.
* Telus’ Twitter comment
I asked for Tony’s comment to the following tweet by Michael Hennessy, Senior VP, Regulatory and Government Affairs, Telus
“Merry Christmas Michael. My Christmas comes early today! [...]“
I will let you hear what Tony said in response to the above tweets in the audio interview. :)
* Few other questions & answers
Tony also indicated that WIND Mobile is a startup company, the network is brand new, and stated that “there is no question that we are going to make mistakes and it is not going to be perfect.” But Tony emphasized their main differences with the incumbents likes of Bell/Telus/Rogers is that WIND Mobile is going to keep listening to customers, “We need feedback on WINDMobile.ca … so we can constantly improve the offering”.
Only time will tell if WIND Mobile can deliver on their promises. The first things we will see are the pricing and service plans. And then the customers will have a chance to give their feedback on the call qualities and internet surfing experiences, etc. Later, we will see if Canadians will get new phone offerings like the iPhones and Androids “soon” as promised. I hope WIND will keep its promises and truly listen to its customers’ feedback and suggestions.
After the government of Canada ground breaking (but part-expected) decision of letting Globalive to launch WIND Mobile in Canada, Globalive CEO Tony Lacavera, Industry Minister Tony Clement, and other experts appeared on BNN.
Dec 12 Update: The nice people from WIND Mobile’s PR firm have gotten back to me today. I hope to talk to Tony coming Monday. Will see. I will post my interview afterwards. Stay tune.
Dec 13 Update: Good news. Did an interview with Tony this afternoon. And after spending a few hours cleaning up the audio mp3 and writing the blog entry, I’ve finally finished the article and audio and you can read and listen to the interview here.
“The federal government has overruled a CRTC decision on the ownership structure of Toronto-based Globalive, opening the door for the wireless company to set up shop as Canada’s fourth national cellphone company.
Industry Minister Tony Clement said Friday he was overturning the ruling by the Canadian Radio-television and Telecommunications Commission in October that the company did not meet Canadian ownership and control requirements.
Clement said that this decision would allow Globalive to set up shop “effective immediately” and would not require the company to make any changes to its ownership structure.”
“The decision is expected to be a blow to the big three wireless providers — Rogers Communications Inc., BCE Inc., and Telus Corp. — as they fought to keep Globalive out of the Canadian market.
Under the federal Telecommunications Act, the federal cabinet has the power to vary CRTC decisions. Mr. Clement said he is satisfied the debt financing provided by Orascom does not constitute foreign control and no changes would be required to the company’s organization. “We are satisfied that in this particular case [Globalive's] board of directors cannot be controlled by the foreign investor.”“
See this gov of Canada decision (Order-in-Council PDF) and a blog post by Michael Geist (I also hope the foreign control limit in the telecom industry will be removed soon). The provocative Henry Mintzberg, Cleghorn Professor of Management Studies, McGill University, once said in an MIT Talk “The thing I always thought of Canada — it is one country that works remarkably well in practice but doesn’t work at all in theory.” and the current Globalive case is one of those example of “work well in practice”.
Check out this WINDMobile ad! No more Hot Dog fee!
Dec 23rd update: Here is CBC report on Globalive/WIND Mobile on Dec 11st.
Like many Canadians, I want to get pay a more reasonable price and get better mobile services. I was hoping WINDmobile would have been launched by now and I will soon be able leave my current provider.
So it was very unfortunate that CRTC threw a curve ball in its decision. But I am determined and I have add WINDmobile to my Christmas/New Year wish list. I hope if enough Canadians speak out and demand mobile competitors like WINDmobile be allowed to compete in Canada, then we can soon have some decent prices and services in Canada. (Note to the Doctor Who fans out there: Remember what Martha Jones did here to defeat the monster? There is hope. :)
“Though many Canadians are frustrated in their own experiences with mobile service providers, they don’t understand the scope of the the issues at hand.
For example, did you know that wireless consumers in this country deal with:
Higher prices: Due to lack of competition and real alternatives, Canadians pay an average of 60% more for mobile wireless services than Americans according to the Telecommunications Policy Review Panel.
Staggering complaints: The Better Business Bureau released its list of top ten consumer complaint calls. Cell phone companies tops that list – soaring above car dealers, movers and even utilities. Clearly Canadian consumers aren’t being treated as they should be and they’re not happy about it.
Among the weakest in the world: Canada’s wireless industry is one of the weakest in the developing world. Merrill Lynch puts Canadian wireless penetration at 65 per cent, last among 22 developed countries (below Tunisia and Iraq). The International telecommunications Union (ITU) has tracked Canada’s decline from 35th in 1998 to 128th in 2008 – far behind many underdeveloped nations.
Oligopoly: The Canadian wireless market is dominated by three very large, very profitable players – Telus, Rogers and Bell. This is not a ‘hypercompetitive market’ as they would have you believe. WIND Mobile, is the only new entrant that offers a truly national wireless alternative.”
P.S. I am a fan of WINDmobile, but I will be less than honest if I don’t mention that I actually agree with the CRTC’s analysis when it made its decision (see further comments here) that Globalive and WINDmobile are foreign controlled. I just think it is time that our telecom laws are updated to remove the foreign ownership restriction. I don’t usually like the idea of government overruling quasi-judicial bodies’ decisions, but I will make an exception here.
Lets give Canada some needed competitions in the mobile industry by exempting WINDmobile, and lets fix the telecom laws next.
CRTC has handed down its decision (Telecom Decision CRTC 2009-678 or PDF). A scan of the CRTC decision leads me to look at the last two pages of charts plus 107, 108 and 119 summing up the decision,
“107. The concentration of debt and equity in the hands of a single entity can create an opportunity for influence. In circumstances such as the present, where a company is heavily debt financed, this opportunity can translate into significant influence over the venture by the debt holder.”
“108. The magnitude of the debt provided by Orascom, the relative debt to equity financing, and the fact that the debt is concentrated in the hands of a single entity cause the Commission concern with the loans as a source of Orascom influence. The modifications to the covenants and terms of the loans do little to reduce this concern. Furthermore, the Commission notes that covenants similar to those deleted from the Orascom loan agreements are still contained in Schedule A to the Shareholders’ Agreement.”
“119. In light of all the above, the Commission finds that Globalive is controlled in fact by Orascom, a non-Canadian. Therefore, the Commission concludes that Globalive does not meet the requirements set out in section 16 of the Act and is not currently eligible to operate as a telecommunications common carrier.”
I think less competition is bad for Canadian consumers. By the way, in the happier times of Sept 2008, I conducted a phone interview with Tony Lacavera, CEO of Globalive, after they launched a few interesting initiatives that I thought would be good for Canadian consumers.
“The commission found it particularly important that Orascom owns 65.1 per cent of the equity, has entered into a strategic technical arrangement with Globalive, controls and holds the ‘Wind’ brand under which Globalive will operate, and holds the overwhelming majority of the outstanding debt,” the regulator said.
“The commission therefore determines that Globalive has not met the requirements of the ownership and control regime and is therefore not currently eligible to operate as a Canadian telecommunications common carrier.”
The CRTC prescribed a list of changes the company could theoretically make in order to bring itself into compliance, which would include amendments to the composition of its board of directors, liquidity rights and the threshold for veto rights.
However, the fact that Orascom controls almost all of the company’s debt is a factor that cannot be easily resolved.”
“In its decision, the CRTC came to a different conclusion than Industry Canada and has indicated that Globalive Wireless is not in compliance with the Canadian ownership and control requirements set out in the Telecommunications Act.
“Having already received approval from Industry Canada, we are extremely disappointed that the CRTC has come to a different conclusion,” said Anthony Lacavera, Chairman, Globalive Wireless Management Corp. “This is a bad day for Canadian consumers. Canadians deserve competition in wireless and this decision represents a major step backwards.””
*******
Oct 29, 2009 Morning: Looking forward to the CRTC Globalive decision to be announced later today after markets close. Here is an excerpt from a Canadian Press report,
If the CRTC decides that Globalive is Canadian enough to compete as a new national cellphone company, it’s a decision that’s likely to shake up foreign ownership rules.
Toronto-based Globalive wants to be Canada’s fourth major wireless carrier and compete with Rogers, (TSX:RCI.B), Bell (TSX:BCE) and Telus (TSX:T) for consumers who want to buy cellphones. But before Globalive can go ahead with its launch later this fall, it must survive a CRTC ruling expected Thursday on its ownership and structure.
[... RBC Capital Markets analyst Jonathan] Allen said if the CRTC approves Globalive’s bid, it will likely launch in Toronto and Calgary next month.
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