New wireless entrants say they intend to serve rural, but need more foreign capital to do it

OTTAWA—Two of Canada’s newest wireless entrants told the Commons industry committee Tuesday that they are prepared to serve Canadian rural communities but that they need access to more foreign capital to do the job. “We do have spectrum in rural areas,” Andrea Wood, chief legal officer and secretary with Globalive Management Wireless Corp., told the committee. “It’s in our interest, of course, to ensure that all the assets in our books deliver value to our shareholders, so we would like to find a way to monetize that spectrum.” Following on the Conservative government’s commitment to open the door to foreign investment in the Canadian telecommunications sector, the industry committee is exploring the proposal. Last week, Ken Engelhart, senior vice-president of regulatory affairs at Rogers Communications Inc., told the industry committee that new entrants like Wind Mobile and Public Mobile cannot be expected to provide service outside of Canada’s large urban centres due to the high cost and low returns of rural service. “Globalive isn’t going to do anything for the rural areas,” Engelhart said. “They are honest about the fact that they are only going to provide service in the major urban areas. None of the new entrants will go to the rural areas.” Globalive launched its wireless service in Toronto and Calgary late last year under the brand name Wind Mobile. The company’s service has since expanded to Ottawa and Edmonton and is expected to launch in Vancouver this summer. Alek Krstajic, CEO of Public Mobile, also appeared before the committee Tuesday, saying the company is prepared to offer rural service. “We have a licence that covers Windsor to Quebec City, and if we have all the capital we need, we will build out Windsor to Quebec City,” he told the committee. “You’ll start with the urban areas and the reason you’ll start with the urban areas is that’s where you actually get the payback that allows you to fund the rural areas.” Krstajic acknowledged, however, that it could take time before Canadians receive rural wireless service from Public Mobile. “For the people who live in those areas, they won’t get our service as quickly as you will if you live in an urban area,” he said. Public Mobile is expected to launch its wireless service in Toronto and Montreal by mid-May. The company has not announced any immediate plans for service beyond the cities. Public Mobile and Wind agreed that more foreign capital would facilitate new players to invest in networks outside of large cities. “Wireless communications should be a right, not a privilege afforded just to the few that can afford it,” Krstajic told the committee. Under questioning, he clarified the statement, saying that the “right” to wireless communications should not be a legal one. He said he meant that wireless devices should be made affordable to all Canadians, and that access to more foreign capital would give Canadian companies the ability to expand their offerings at more affordable prices. jmigneault@thewirereport.ca

New wireless entrants say they intend to serve rural, but need more foreign capital to do it

News | April 20, 2010

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