Globalive Wireless Management Corp., which operates the Wind Mobile cellular service, “isn’t going to do anything for the rural areas,” according to one of its competitors.
But a Toronto-based analyst doesn’t think it’s an issue.
“From a strategy standpoint, you have to go where the population is,” said Michelle Warren, president of M.W. Warrren Research & Consulting.
Globalive’s Wind Mobile service is currently available in Toronto, Calgary, Edmonton and Ottawa. Customers outside of Globalive’s coverage areas – or “home” zones – can still use their handsets, but pay 25 cents a minute in roaming fees.
“Globalive isn’t going to do anything for the rural areas,” said Ken Engelhart, vice-president of regulatory affairs at Rogers Communications Inc. “They are honest about the fact that they are going to only provide service in the major urban areas. None of the new entrants will go to the rural areas.”
Officials from Toronto-based Globalive were not available to respond to Engelhart’s comments at press time.
By “new entrants,” Engelhart was referring to companies that bid in the Advanced Wireless Spectrum auctions in 2008.
Engelhart made his comments during testimony Thursday before the House of Commons Standing Committee on Industry, Science and Technology.
He was answering a question from Anthony Rota, a Liberal Member of Parliament who represents the rural Ontario riding of Nipissing-Temiskaming. Rota expressed concern about cellular coverage in rural areas.
Globalive was one of the reasons the Commons industry committee held hearings on foreign ownership in the telecommunications sector. During last month’s speech from the throne, the federal government promised to “open the doors” to more foreign investment in telecommunications.
Three months earlier, Cabinet allowed Globalive to roll out Wind Mobile, when it over-turned aruling by the Canadian Radio-television and Telecommunications Commission (CRTC). The Commission had ruled Globalive was, in fact, controlled by Orascom Telecom Holdings SAE of Egypt.
Orascom only holds 20 per cent of Globalive’s voting shares. The other 80 per cent are held by Globalive’s Canadian chairman, Anthony Lacavera, which means it complies with a clause in the Telecommunications Act requiring that 80 per cent of voting shares of Canadian facilities-based carriers be held by Canadians. But the law also stipulates a carrier cannot be “otherwise controlled” by foreigners. The CRTC was convinced Globalive was other controlled by Orascom, which owns the Wind brand, 65 per cent of Globalive’s total equity and provided most of Globalive’s startup capital.
Globalive spent $442 million on spectrum in the Advanced Wireless Spectrum auction in 2008. Public Mobile Inc., which spent only $52 million on spectrum, is set to launch next month. Other new entrants include DAVE Wireless, which plans to roll out service this year under the Mobilicity brand.
Shortly after the auctions in 2008, Globalive estimated it would need $1.9 billion over the next 10 years to build its network. Orascom said it would contribute $700 million
Globalive has not disclosed its subscriber numbers.
Warren said, based on comments posted on blogs, there seems to be a lot of interest in Wind Mobile.
“They seem to be gaining some pretty good traction in the cities,” she said but added a lot of people still have contracts with other carriers, for which they are obliged to pay penalties if they stop service early.
Despite the good traction so far, there have been some slipups.
And the Globalive has been unable to get tower-sharing agreements from incumbent carriers, Lacavera said Thursday in a speech at the Empire Club. Network World Canada did not attend the speech but a Globalive spokesperson provided a copy of Lacavera’s speaking notes. The note state Globalive made more than 100 tower sharing requests but has not been successful.
Warren did attend Lacavera’s speech and was shocked they company could get no tower-sharing deals.
“They are essentially being blocked out of the market,” she said. “That’s just not right ethically speaking.”