NextWave launches salvo at government over restriction on foreign investment

A huge swath of 2.3 GHz spectrum, prime real estate for wireless broadband services, risks laying fallow for some time unless the Canadian government removes restrictions on direct foreign investment in telecommunications, warns NextWave Wireless Inc., the US-based holder of the bandwidth. Writing to the Competition Policy Review Panel (CPRP), NextWave says that its investment intentions for the Canadian market have been hampered by the government's current rules limiting foreign investment in telecommunications facilities. The company notes that it has established a presence in Calgary and is prepared to make additional investments in facilities and personnel, but progress to use the spectrum has been slow as a result of Canada's foreign ownership restrictions. "Canada can be an attractive investment destination, but there are many other attractive destinations that seek investment," writes NextWave. "As NextWave and other companies well know, each investment project will have its internal advocates and, because capital and talent is limited, not all projects can be pursued. The Canadian foreign investment restrictions can only diminish the likelihood that a Canadian project will be selected for funding among competing opportunities."With the restrictions in place, the company indicates that Canadian consumers, both business and residential, "will not be able to realize the full benefits of our innovations as quickly as will consumers in other countries."NextWave notes that the government is sending a mixed message to foreign-owned companies about the advantages of investing directly in Canada. The wireless firm points to the Invest in Canada website which touts the country as a good place in which to invest. Yet, the country still maintains heavy restrictions on foreign investment in telecommunications. NextWave obtained the 2.3 GHz licences when it acquired 4253311 Canada Inc., an operation that was owned by venture firm Columbia Capital III LLC and WCS North Inc. WCS was controlled by four shareholders: Rajendra Singh, Neera Singh, Samir Raj Singh and Hersh Raj Singh. The numbered-company participated in the 2300/3500 MHz spectrum auction in 2005 and paid nearly $8 million for 88 licences in the 2305-2320 MHz and 2345-2360 MHz bands. Its spectrum licences cover regions with a combined population of about 15 million Canadians. The company is a full-service wireless solution provider, offering equipment and software as well as semiconductors and spectrum. NextWave provides its spectrum to operators that require it in a particular market. Despite the seemingly veiled threat of letting the spectrum lay fallow, NextWave has build-out requirements for the spectrum. According to the 2300/3500 MHz spectrum licensing policy, licensees have to demonstrate they have deployed the spectrum to cover a minimum of 50% of the population in the licence area by year five of the 10-year licence term.

NextWave launches salvo at government over restriction on foreign investment

News | January 23, 2008

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