In the shadow of a foreign takeover of domestic wireless operator Sprint Nextel by Japanese operator Softbank, the Canadian market is set for a similar exchange as Egyptian-based Orascom is set to take a controlling stake in Wind Telecom’s parent company Globalive Investment Holding.
During a board of directors meeting over the weekend, Orascom said that due to recent changes in Canada’s foreign-ownership rules the company was set to take its control of voting shares in Globalive from its current 32.02% to 65.08%. Orascom has held a 65.08% interest in Globalive, but was prevented from owning a controlling stake due to previous rules.
“The conversion will result in [Orascom Telecom Holdings] taking control of [Globalive Investment Holdings Corp.]; therefore an approval from the Canadian investment authorities is required,” the firm noted. “Management expects such approval to be obtained by the close of 2012 or early 2013.”
The Canadian Supreme Court ruled earlier this year that foreign companies could take ownership control of telecom operators that held less than 10% market share. The initiative was pushed by Canada’s Minister of Industry as a plan to increase competition in the country’s mobile space that has been dominated by a trio of carriers in Rogers, Telus Mobility and Bell Canada. The lack of competition is more pronounced in that Telus Mobility and Bell Canada also have a close partnership that has Telus Mobility operating in the western part of the country and Bell Canada in the eastern part.
Analysts questioned the previous regulation, which was supported by the country’s established operators. Those regulations had at one point threatened to shutter Globalive’s deployment plans.
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