When giving the parent firm – Globalive Communications Corp. – the green light to launch (overruling an earlier CRTC decision) Industry Minister Tony Clement described Globalive as “a Canadian company that meets Canadian control and ownership requirements set out in the Telecommunications Act.”
He based this statement on the following facts:
– The firm’s voting shares are controlled by Canadian investors
– At least 80 per cent of Globalive’s directors are Canadian
On the other hand, the Communications Energy and Paperworkers’ union calls Clement’s decision “illegal” and plans to challenge it in court.
It says the decision essentially involves lifting restrictions on foreign ownership.
And Vancouver, based telecom firm Telus described it as “a sell out our telecom and cultural sectors to foreign investors.”
So who’s right? Can Globalive be dubbed a “Canadian” company — given that most of its directors are Canadian, even though most of its funding comes from Orascom Telecom Holding SAE, a Cairo-based carrier.
Most Canadians, it seems, give a hoot.
They rightly sense that these issues hardly matter when you consider that the firm is going to be employing thousands of Canadians in areas very hard hit by the recession – such as Windsor, Ont.
And of course, this injection of more competition into a monopolistic market is the best news of all.
The hope is a new aggressive competitor (as Globalive is expected to be) will force the others – especially the Big Three – to cut their prices.
Analysts such as Eamon Hoey say Canadian consumers will enjoy “lower prices, broader choice and better service”
Let’s add some context to this.
The “better service” is the most believable. When a company doesn’t have you in the vise of a long-term contract, it had better provide you with good service or you’ll go elsewhere.
What about the lower prices bit?
Consider this:
Average monthly contract rates for cell phone plans in the developed world is around $12 a month or $145 a year. In Canada, the average yearly contract is around $500 – more than three times more.
The great hope — in the medium term, at least — is Wind Mobile prices and plans will be lower and Canadian cell users will get far more bang for their buck.
The reality is when Globalive did announce its pricing earlier this month many consumers were disappointed.
The radical plan price breaks they were hoping for just weren’t there.
Pricing packages offered by the company aren’t much different then what’s already being offered.
For instance a premium voice and data plan from Wind costs about $80 a month – very similar to what competitors – such as Virgin Mobile, Koodo and Fido – are offering.
As Iain Grant, managing director of the Seaboard Group put it:” We expected a lot and got less than we’d hoped.”
The one bright spot is the firm’s “unlimited” data plan for smartphones. It costs you $35 a month, and in addition to a voice plan, gives customers up to five gigabytes of downloads. That’s a far better deal than what any other carrier offers.
The big news I think is not so much that we have a new wireless player, but that Wind Mobile’s entry will open the floodgates to even more competition.
There’s every indication this will be the case.
There are reports that Dave Wireless, which recently US $75 million U.S. in new funding, will open its doors to consumers early next year. And Public Mobile, a discount cellular company, and Vidéotron, owned by Quebecor, are also expected to start operations in eastern Ontario next year.
Welcome to a new era of wireless competition.